Report from the Commission - Fifth survey on State aid in the European Union in the manufacturing and certain other sectors
Date: 1997-04-16
Institutions: European Commission
Subjects: State aid, aid to industry, competition policy, manufactured goods, report

COMMISSION  OF THE  EUROPEAN  COMMUNITIES 

Brussels,  16.04.1997 
COM (97)  170 final 

REPORT FROM THE COMMISSION 

FIFTH  SURVEY  ON  STATE  AID  IN THE  EUROPEAN  UNION 

IN THE  MANUFACTURING  AND  CERTAIN  OTHER  SECTORS 

CONTENTS 

INTRODUCTION 

Background 

Conceptual  remarks 

PART  I -  AID  TO  THE  MANUFACTURING  SECTOR 

Volume  and  trends  of  aid  to  manufacturing 

-  Community  totals 

-  Comparisons  between  Member  States 

Aid  to  shipbuilding 

Types  of  aid  instruments 

Objectives  of  aid 

German  State  aid  to  the  new  Lander 

PART  II  -  OVERALL  NATIONAL  AID  IN  THE  MEMBER  STATES 

Aid  to  other  sectors  than  industry 

-  Aid  to  agriculture 

-  Aid  to  fisheries 

-  Aid  to  transport  (railways) 

-  Aid  to  coal  mining 

Volume  of  overall  aid  in  the  Union 

-  Budgetary  impact  of  aids 

RESULTS 

CONCLUSIONS 

ANNEXES 

Annex  I:  Technical  Annex 

Annex  II:  Statistical  Annex 

Annex  III:  Community  Funds  and  Instruments 

1 

3 

5 

5 

7 

10 

1 3 

16 

23 

24 

24 

27 

29 

31 

34 

35 

37 

39 

43 

57 

75 

l<\  bi 

TABLES  AND  FIGURES 

Table  1 

Table  2 

Table  3 

State  aid  to  industry 

-  annual  values  in  constant  prices  (1993) 

State  aid  to  industry 

-  annual  values  1990  to  1994 

State  aid  to  industry 

-annual  averages  1990-1992  and  1992-1994 

Table  4 

Aid 

to  shipbuilding 

in  1992-1994 

Table  5 

State  aid  to  industry 

1992-1994 

-  breakdown 

according 

to  type  of  aid 

Table  6 

State  aid  to  industry 

1992-1994 

-  breakdown 

according 

to  sector  and  function 

Table  7 

State  aid  to  industry  1990-1992  and 

1992-1994 

-breakdown 

to  main  objectives 

Table  8 

State  aid  to  industry 

in  the  Community 

1990-1994 

Annual  values  in  constant  prices 

(1993) 

Table  9 

National  aid  in  respect  of  products 

listed 

in 

Annex  1/  of  the  EC  Treaty  (Agriculture) 

5 

6 

1 

12 

13 

20 

21 

22 

26 

Table  10 

State  aid  to  fisheries 

in  per  cent  of  gross  valued  added  in  this  sector  28 

Table  11 

Community 

interventions 

in  the  fisheries  sector 

Table  12 

State  aid  to  transport 

(Railways) 

Table  13 

State  aid  to  the  coal  industry 

Table  14 

Overall  national  aid  in  the  Member  States  1990-92  and  1992-94 

Table  15 

Overall  national  aid  in  the  Member  States  19.90-1992  and 

1992-1994 

in  per  cent  of  GDP 

Table  16 

Overall  national  aid  in  the  Member  1990-92  and 

1992-94 

broken  down 

into  main  sectors 

Statistical 

Annex 

Table  A  1 

State  aid  to  industry 

in  current  prices  (National  currency) 

Table  A2 

State  aid  to  industry 

in  current  prices  (ECU) 

Table  A3 

German  State  aid  to  the  new  Lander  -  yearly  average  1992-1994 

Table  A4 

Total  State  aid  -  annual  average  1992  -  1994  by  Member  State 

Table  A 

Annual  Community  Expenditure 

Table  B 

Other  Community 

Instruments 

Table  CI 

Community  Expenditure  by  Member  State 

Table  C2 

'  Community  Expenditure  by  Member  State 

Figures 

Figure  1 

State  aid  to  industry  as  percentage  of  value  added 

Figure  2 

State  aid  to  industry:  Distribution  by  tax  and  budgetary  expenditure 

Figure  A  1  Aid 

to  industry  and  Community  Funds  per  employee 

29 

30 

31 

34 

35 

36 

58 

59 

60 

61 

83 

84 

85 

86 

8 

1 5 

62 

lb 

INTRODUCTION 

Background 

The  need for an effective  method of systematic quantification  of State aid for 

the  purposes  of  competition  policy  was  fully  perceived  in  1985,  the  year 

which saw the  publication  of the Commission White  Paper on completing  the 

internal  market.  At  the  end  of  that  year  the  Commission  instructed  its 

departments  to  compile  and  publish  a  fact-based  analytical  survey  on  the 

granting of State aid in the Member States of the  Community. 

Since the  First Survey, covering  1981-86, concluded that transparency  in the 

field of State aid had to be increased, it was decided that  updating  should be 

carried  out,  and  this  was  done  in  the  Second,  Third  and  Fourth  Surveys, 

covering the periods  1987-88,  1989-90 and  1991-92  respectively. 

2.  The  Fifth  Survey  updates  the  existing  data  and  covers  the  period  up  to  and 

including  1994.  It covers the  last years  before the  accession  of the three  new 

Member  States  and  provides  information  on  the  then  prevailing  structure  of 

state support to companies  in the twelve  Member  States of the  Community.  It 

is the  first  Survey  that  partially  profited  from  the  new  system  of  standardized 

annual  reports  proposed  by  the  Commission  to  the  Member  States  in  1994, 

and which is now taking full effect. 

3.  The  publication  of  this  Fifth  Survey  reaffirms  the  commitment  of  the 

Commission  to  maintain  an  open  policy  on  the  control  of  State  aid.  This 

emphasis  on transparency  is increasingly  important given the environment  in 

which the  Commission  currently  operates,  both within the  Union  itself  and  in 

the wider  international  context. 

The  completion  of  the  internal  market  and  the  approaching  economic  and 

monetary  union  require  an  increasingly  effective  control  of  State  aid  since 

such  aid can  be  used to  replace  barriers  to trade  that  have  been  dismantled 

in the integration  process. 

Member  States  will  willingly  contribute  to  the  completion  and  future  proper 

functioning  of  the  internal  market  only  if  they  are  certain  that  all  other 

Member  States  abide  by  the  same  rules  when  subsidising  their  firms. 

Compiling  and  publishing  data  on the  aid  amounts  awarded  is  one,  and  not 

the  least  means  with  which  the  Commission  demonstrates  to  the  Member 

1  c 

States  that  it  is  constantly  keeping  a  close  watch  on  public  interventions, 

both  on  their  overall  development  and  the  development  in  each  of  the 

Member  States.  This  in turn will  allow  it to  adjust  its  policies where  required 

in  order  to  execute  a  fair  and  efficient  State  aid  control,  and  to  adapt  to  a 

changing economic  environment. 

4.  Looking  at  the 

international  context,  this  decade  has  witnessed 

the 

conclusion  of  the  Europe  Agreements  with  the  Central  and  East  European 

Countries  (CEEC), creating an historical association between the  Community 

and  this  group  of  countries  which  aims  at  their  eventual  accession  to  the 

Union.  The  burdens  of  the  past  of  these  countries 

in  transition  are 

particularly  heavy.  This  urgently  calls  for  increased  transparency  in the  field 

of  State  aid.  Through  the  publication  of  its  own  Surveys  on  State  aid  the 

Commission  and  indeed the whole European  Union give a concrete  example 

to  these  countries  of  the  level  of  transparency  that  is  expected  of  modern, 

competitive  market  economies.  This  will  facilitate  fulfilling  the  reporting 

obligation of the CEEC  as laid down in the Europe Agreements. 

Equally  important,  in the context of the World Trade  Organization  the  Survey 

provides  an  example  of  what  we  should  expect  from  our  trading  partners  in 

terms  of  transparency.  In  this  respect  it  complements  the  notification  of 

subsidies  of the  Community  and the  Member States  pursuant to Article  25 of 

the WTO Agreement  on Subsidies  and Countervailing  Measures.  In a similar 

fashion  the  Survey  furthermore  provides  an  example  for  our  partners  in  the 

OECD where  the  Commission  continues to  participate  in the  study  on  public 

support to  industry. 

Conceptual  remarks 
t 

This  Fifth  Survey  on  State  Aid  covers  the  period  1992-1994,  updating  the 

Fourth  Survey  (published  in  1995)  which  covered  the  period  1990-1992. 

Included  in  the  Survey  is  national  aid  given  in  the  Community  of  twelve 

Member  States  to  the  sectors:  industry,  agriculture,  fisheries,  coal,  and 

transport,  of  which  the  latter  comprises  railways.  The  reasons  for  these 

limitations  together  with  general  explanations  of the  methodology  used  are 

given  in  the  Technical  Annex  (Annex  I).  The  Statistical  Annex  (Annex  II) 

contains  basic  statistical  data  on  aid  to  industry  and  on  overall  aid.  An 

overview of Community  Funds and Instruments  is given in Annex III. 

When comparing the different  Member States, the analysis of the aid figures 

concentrates  on the annual averages over the three-year-period  1992-1994. 

Where appropriate, the figures for the period  1990-1992  are given by way  of 

comparison. 

As  was  already  the  case  in  the  preceding  surveys,  the  periods  compared 

overlap  by  one  year.  For  comparisons  between  Member  States,  the  use  of 

overlapping  three-year  averages  is  the  only  way  of  arriving  at  conclusions 

supported  by  sufficiently  statistically  reliable  figures.  This  is  because  for 

some  of  the  figures  amounts  are  at  present  only  known  over  longer  than 

one-year  periods.  In  such  cases,  the  amounts  have  to  be  arbitrarily 

assigned  to  individual  years.  Secondly,  the  amounts  for  the  last  year 

reported  on  (1994)  are  to  a  non-negligible  extent  provisional  and  -  as  was 

already  the  case  for  the  last  year  of  the  period  reviewed  by  the  preceding 

Survey  (1992)  - will  certainly  be  modified  by  the  Member  States  during  the 

next verification  of data for subsequent years. The  resulting weak  viability  of 

annual  figures  -  particularly  when  broken  down  for  Member  States  -  is 

statistically  straightened  out  by  using  overlapping  three-year  averages.  In 

order  to  make  the  averages  for  the  previous  period  comparable  with  those 

of  1992-1994,  the  absolute  figures  1990-1992,  unless  otherwise  indicated, 
are  expressed  at  1993  prices1.  Throughout  the  Survey,  therefore,  figures 
are in real terms.2 

For  this  reason,  and  because  of  the  -  in  some  cases  considerable  -  modifications  by 
the  Member  States  of  the  1992  figures  mentioned  above,  figures  for  1990-1992  are 
not  the  same  as those  published  in the  Fourth  Survey. 

Figures  for  aid  to  industry  at  current  exchange  rates  are  given  in  the  Statistical 
Annex  (Annex  II). 

7.  The figures for  1993 and  1994 were drawn up by Commission  departments 
in  cooperation  with  the  Member  States  concerned.  Together  with  the 
already  existing  figures  for  1990-1992  they  were  verified  by  the  Member 
States and, if necessary, modified. This procedure ensures that  a relatively 
high degree of reliance can be placed in the data. 

As  far  as  Greece  is  concerned,  the  Commission,  when  establishing  the 
Greek figures for preceding  reports, used as a reference  a study  on Greek 
State aid and spending  undertaken by a consultant. This study then served 
as a basis for  the  Commission  departments' estimates  and  extrapolations. 
The  contribution  received  from  the  Greek  authorities  has  permitted 
improvement  of 
the  Greek  data.  Regrettably,  however,  as  no 
comprehensive  contribution  is  forthcoming  from  the  Greek  authorities  the 
figures  still  remain  essentially  estimates,  and  therefore  the  results  for 
Greece should be treated with caution. 

PART I-AID  TO  INDUSTRY 

V 

Volume and trend of aid to  industry 

8. 

In the  Community, the  industrial  sector  is granted  more aid than  any  of the 

other  sectors  covered  by this  Survey;  in fact,  during  the  period  1992-1994 

45%  of  overall  aid  went  to  this  sector.  The  analysis  of  aid  in  this  sector  of 

the economy  occupies, therefore, the centre of this Survey. 

Community  Totals 

9.  Table  1 shows  the  annual  amounts  of  aid  to  industry  in the  Community  in 

the years  1990 to  1994. 

Table 1 

State  aid to  industry  in the  Community  1990-1994 
Annual  values  in constant  prices  (1993). 

1990 

1991 

1992 

1993 

1994 

Million ECU 

EUR 12 

43777 

39827 

41196 

43890 

42830 

Although  the  figures  should  be  interpreted  cautiously3,  they  allow  the 
conclusion  that the  gradual downward trend observed  in the  past  appears to 

have come to  an end. This  survey  indicates  a stable tendency  in the  overall 

volume  which  is  situated  around  an  annual  average  of  almost  43  billion 

ECUs.  The  high  figure  for  1990  can  be  explained  by  some  untypical  aid 
awards  in two  Member  States4. 

10.  Absolute  values,  even  if aggregated  at  Community  level, are  of  only  limited 

use for reflecting trends  in national aid policies over time. Therefore, Table 2 

shows  aid to  industry  as a percentage  of value added, per person  employed 

See  point  6  above. 
Some  major  sectorial  restructuring  was  supported  in  Italy  and  Spain. 

in  this  sector,  and  in  percent  of  intra-Community  exports  of  manufactured 
goods.5 

Table 2 

State aid to industry  in the  Community 
Annual values  1990 to  1994 

EUR 12 

1990 

1991 

1992 

1993 

1994 

In per cent of value 
added 

In ECU per  person 
employed* 

In per cent of  intra-
community  export** 

4,0 

3,6 

3,9 

4,2 

3,8 

1333 

1238 

1318 

1472 

1472 

20,1 

18,6 

19,7 

20,8 

20,7 

at constant  1993 prices 
intra-Community  exports of industrial  products 

Aid  levels  relative  to  value  added  fluctuate  around  four  percent  during  the 

period under  review. 

The  amount  of  aid  per  person  employed  in  industry  varies  between  ECU 

1253  in  1991  and  ECU  1471  in  1994 during  the two  periods  reviewed.  The 

decline 

in  manufacturing  sector  employment  has  an  effect  on 

the 

development  of this  indicator from  1991 onwards. Aid relative to the value of 

intra-Community  exports  of  manufactured  goods  - this  ratio  can  be seen  as 

a good indicator for the potential distortion of competition  in the Community  -

also shows a slight upward tendency from  1991. 

11.  From  Table  1 and  2  it  can  be  seen  that  the  absolute  aid  amounts  and  the 

three  indicators  used  to  mirror the tendency  of aid to  industry  at  Community 

largely  coincide:  they  indicate  that  the downward  trend observed  in the  past 

has been replaced by a stable tendency  in the overall volume during the two 

periods  reviewed.  Thus  the  concern  that  the  unfavourable  economic 

conditions  prevailing  at the  time  together  with  the full  impact  of  competition 

Since  a small  but  not  exactly  quantifiable  part  of  the  aid  amounts  has  to  be  attributed 
to  the  service  sector  (trade,  repair,  consultancy),  the  figures  shown  may  be  slightly 
overestimated. 

brought about by the progressive establishment of the internal market might 
tempt  governments  to  resort  to  State  aid  seems  not  to  have  been  wholly 
unfounded. 

Comparisons between Member States 

12.  Table 3 compares the average aid levels in industry for the different Member 
States6 for the periods 1990-1992 and 1992-1994,7 expressed in per cent of 
gross value  added and aid amounts  per person employed in this  sector. In 
addition, real term absolute amounts of aid are given for information. 

Table 3 

State aid to industry 
Annual averages 1990-1992 and 1992-1994 

In per cent of value added 

In ECU per person 
employed* 

In million  ECU* 

Belgium 

Denmark 

Germany 

-Old Lander 

-New Lander 

Greece 

Spain 

France 

Ireland 

Italy 

Luxembourg 

Netherlands 

Portugal 

United  Kingdom 

EUR  12 

1990-1992 
7,9 

1,9 

3,5 

12,5 

2,1 

2,7 

2,7 

8,9 

3,5 

2,5 

4,6 

1,4 

3,8 

1992-1994 

1990-1992 

1992-1994 

1990-1992 

1992-1994 

4,8 

2,8 

4,8 

10,5 

1,7 

3,3 

3,5 

8,4 

2,9 

2,1 

4,4 

0,8 

3015 

639 

1514 

921 

5415 

1785 

605 

1114 

1271 

2397 

1669 

994 

514 

439 

1773 

1017 

2012 

553 

11610 

1588 

571 

1350 

1837 

2379 

1267 

822 

480 

279 

2297 

337 

13965 

7373 

6592 

1180 

1738 

5280 

314 

1331 

511 

17410 

4156 

13254 

1035 

1494 

6006 

463 

12321 

11529 

62 

1003 

618 

2484 

48 

812 

568 

1433 

4.0 

1296 

1419 

41600 

42639 

1990-1992 averages in 1993 prices 

Germany  has  been  divided  into  the  old  and  new  Lander  in  order  to  show  clearly  the 
different  development 
in  the  two  German  areas,  marked  by  the  unprecedented 
adjustment  process  of  the  new  Lander  economy  to  a market  system. 

As  explained  in  point  6  above,  detailed  breakdowns  by  Member  States  can  only  be 
compared  reliably  if  overlapping  three-year  averages  are used. 

The  aid  levels  show  significant  differences  between  the  individual  Member 

States. Figure  1 gives an overview  of the situation when aid levels are  expressed 

as aid to industry  relative to value added. 

Figure 1 

State aid to industry 
as percentage of value added (averages 1990-1992 and 1992-1994) 

•  1990-1992 

1992-1994 

The  highest  aid  levels  are to  be found  in Greece  and  Italy.  These  countries 

rank  high  above  Community  average.  As  noted  above,  the  continuing 

uncertainty  attached  to the figures for Greece does  not yet  allow  any  further 

detailed  comment. 

Portugal,  Belgium  and  Germany  remain  above  Community  average,  while 

Ireland, France, Luxembourg  and Denmark  are all slightly  below. 

The  lowest  aid  to  industry  is  given,  in  declining  order,  in  the  Netherlands, 

Spain  and  the  United  Kingdom.  In  all  these  countries  aid  is  far  below  the 
Community  average  and  declining  compared  to the  previous  period.  Due  to 

lack  of  statistics  aid  in  per  cent  of  value  added  for  the  two  distinct  parts  of 

reunified Germany  could  not be calculated. 

13.  Aid per person employed  in Italy is far above all Member  States, followed  by 

Germany and  Ireland. The extremely  high figure for the new German  Lander 

is due  both to  important  assistance  granted  by the Treuhand  and to  a  sharp 

decline  in  the  number  of  employees.  The  increase  as  compared  with  the 

previous  reporting  period  reflects  that  the  full  impact  of  the  restructuring 

process  following  German  reunification  in  1990,  set  in  during  the  current 

review  period.  In  contrast  aid  per  person  employed  in  the  old  Lander  has 

declined.  Belgium  is  above  the  Community  average,  with  France  and 

Luxembourg  slightly  below.  The  group  of  low  aid  givers  now  comprises,  in 

descending  order,  Denmark,  the  Netherlands,  Spain,  Portugal,  and  the 

United Kingdom. 

14.  As  a general  conclusion  on  the  differences  in aid  trends  between  Member 

States,  it  can  be  established  that  significant  differences  between  the 

individual countries remain. 

A  comparison  of  the  four  big  economies  shows  that  in  Italy  aid  as  a 

percentage  of  value  added  is  more  than  10 times  as  high  as  in  the  United 

Kingdom,  two  and  a  half  times  as  high  as  in  France,  and  1,8  times  as  high 

as  in  Germany.  When  aid  is  expressed  in  terms  of  ECU  per  person 

employed, 

the  same  differences  can  be  observed.  The  observed 

discrepancies  between  the  central  Member  States  are  reflective  of  their 

differing  views  on the  use of the State aid instruments, and are  in this  sense 

not overly alarming. 

When  considering  the  overall  differences  in  the  Community  under  the 

aspect  of  cohesion,  however,  the  results  do  cause  some  concern.  A  direct 

comparison  between  these  four  Member  States  and  the  four  cohesion 

countries  -  Spain,  Ireland,  Portugal,  and  Greece  -  reveals  that  the  relative 

importance  of industrial support  is rising  in the more central Member  States. 

As  a  matter  of  fact,  in  the  four  big  economies,  aid  expressed  as  a 

percentage  of value  added was  3,7%  in  1990-1992  and 4,2%  in  1992-1994, 

whereas  in  the  cohesion  economies  the  same  indicator  falls  from  3,3%  to 

2,9  % in the  same  period. Table  3 also  shows that  the  volume  of  aid  to  the 

four  cohesion  countries  is  decreasing  from  9,3  to  8,3%  of  total  aid  to 

industry  in the  Community  whilst the  share  of the four  big  economies  of this 

aid,  having  been around  82% during the period  1990-1992 has  risen to 85% 

for  the  period  1992-1994,  notwithstanding  the  fact  that  aid  in  the  United 

Kingdom  has  actually  decreased  by  42  per  cent  between  the  two  periods 

while aid in Italy has decreased  by 6 per cent. 

Amongst  the  cohesion  countries,  the  situation  of  Spain  is  particularly 

aggravated.  With  10  per  cent  of  the  EU  population  and  25  per  cent  of  the 

objective  1  population,  Spain  accounts  for  only  3,5  per  cent  of  the  total 

volume  of  aid  to  industry  and,  excluding  the  United  Kingdom,  ranks  in  last 

position when  aid is expressed  in per cent of gross value added  or in aid per 

person employed. 

The  four  Member  States  where  national  public  support  to  industry  is 

increasing  -  Germany,  France,  Denmark  and  Ireland  -  accounted  for  about 

48  per  cent  of  all  industrial  aid  in the  Community  during  the  period  1990-92 

and  about  57  per  cent  in  the  period  1992-94.  At  the  same  time,  national 

public  support  to  industry  in the  other  Member  States  decreased  by  almost 

3 500 million  ECUs. 

This unbalanced situation does  not contribute to economic convergence  and 

demonstrates  that  there  is  room  left  for  improving  economic  and  social 

cohesion.  In this  context  it should  be noted that  in addition to  national  State 

aid,  industry  also  benefits  from  Community  interventions  via  the  Structural 

Funds  (see  Annex  II,  Figure  A1).  The  effectiveness  of  these  instruments, 

however,  depends  crucially  on their  not being outweighed  by an  unbalanced 

development  in the use of State aid measures in the Member  States. 

Aid to  shipbuilding 

15. 

In  shipbuilding,  which  is  a  sub-sector  of  industry,  the  granting  of  aid  is 
governed  during the  reporting  period by the Seventh  Shipbuilding  Directive8 
which applied from the 01/01/1992. 

Table  4  shows  contract  related  operating  aid  covering  new  constructions, 

conversions  and  fishing  vessels,  and  thus  reflects  the  aid  intensities  for 

which  the  Commission  sets  ceilings  when  implementing  the  shipbuilding 

directive. The  aid ceilings  under the prevailing  Directive are 4,5% of  contract 

value both for ships with a contract value of less than ECU  10 million and for 

conversions,  and  9,0%  of  contract  value  for  ships  with  a  contract  value  of 

more than  ECU  10 million. 

8  OJ  L 380  of  31.12.1990. 

10 

In  addition  to  operating  aid,  the  shipbuilding  sector  can  receive  aid  for 

restructuring  and for  privatization  (the latter only applies to the  new  German 

Lander).  During  the  period  under  review  restructuring  aid  totalling  about 

ECU  800  million  has  been given  in  Belgium, Greece  and  Spain.  In the  new 

German  Lander  aid  for  privatization  between  1992  and  1994  adds  up  to 

about  ECU  1380 million. 

When  relating  total  aid given  in the  shipbuilding  sector to  the  sector's  value 

added  the  conclusion  can  be  drawn  that  this  is  a  heavily  supported  sector. 

As  was  earlier  seen  from  Table  3,  aid  for  the  whole  manufacturing  sector 

amounts  to 4,0% of the  sector's  value added, whereas  for the  sub-sector  of 

shipbuilding  aid covers 26% of the sector's value added. 

The  Community  average  for  aid  to  the  shipbuilding 

industry  strongly 

declined  from  34%  of  value  added  for  1988-1990  to  24%  for  1990-1992, 

rising slightly to 26% for  1992-1994. 

In  the  other  sub-sector  of  industry,  steel,  the  granting  of  aid  in  the  period 

under review was  regulated  under the fifth Steel Aids Code of  1991. After  aid 

had  been  virtually  phased  out  by the  end  of the  previous  period  of  reporting 

(1990-1992),  1994  saw  the formal  adoption  by the  Commission  of  decisions 

under  Article  95  ECSC  Treaty  concerning  the  restructuring,  and  in  some 

cases  privatisation,  involving  steel  companies  in  the  new  German  Lander, 

Spain,  Italy  and  Portugal.  Together  these  aids  amounted  to  around  ECU 

2  900  million  in  1994.  This  amount  does  not  comprise  aid  granted  in  this 

sector  for  other  objectives  such  as  R&D,  regional  development  and 

environmental  protection. 

11 

Table 4 

Aid to shipbuilding  in 1992-1994  in per cent of contract values of ships 

I 

1992 

Small 
Ships* 

Large 
Ships** 

Total 

Small 
Ships 

1993 

Large 
Ships 

Total 

Small 
Ships 

1994 

Large 
Ships 

Total 

| 

Belgium 

Denmark 

Germany 

New Lander*** 

France 

Spain 

Greece 

Italy 

Netherlands 

!  Portugal 

!  U.K. 

j  EUR 10**** 

0,0 

0,0 

4,5 

0,0 

4,2 

0,0 

4,0 

0,0 

4,4 

0,0 

8,5 

8;5 

0,0 

8,3 

0,0 

7,5 

0,0 

9,0 

0,0 

4,3 

8,5 

6,0 

0,0 

4,3 

4,3  "; 

8,5 

4,5 

7.6 

7,3 

4,1 

8,1 

7.3 

8,2 

4.4 

7.3 

6,6 

4,1 

6,8 

6.1 

| 

0,0 

0,0 

9,0 

9,0 

0,0 

9,0 

9,0 

5,0 

4.3 

8.3 

5.9 

4,3 

8,3 

6,6 

| 

0,0 

4,5 

9,0 

8,5 

3,8 

9,0 

8.2 

| 

4,7 

3,8 

4,5 

4,1 

3,7 

4.5 

3,8 

! 

0,0 

0,0 

0,0 

0,0 

6,1 

4,5 

8,5 

6,2 

4,3 

7,8 

0,0 

4,5 

4.1 

8.8 

0,9 

7,7 

8,8 

1,1 

6,6 

! 

Small  ships  are  those  with  a  contract  value  of  less  than  ECU  10  million.  For  these  the 
maximum aid intensity  allowed  by the 7th Shipbuilding  Directive is 4,5 % of contract value. 

"  Large  ships  are  those  with  a  contract  value  of  more  than  ECU  10  million.  For  these  the 
maximum aid intensity  allowed  by the 7th Shipbuilding  Directive is 9,0 % of contract value. 

**  According  to  Council  Directive  92/68/EEC,  until  31  December  1993  operating  aid  for  the 
shipbuilding  and  ship  conversion  activities  of yards  operating  in  the  territories  of  the  former 
German  Democratic  Republic  have been considered compatible with the common  market  up 
to a maximum of 36 % of  reference  annual turnover. The amounts  spent under this  provision 
are not included in this table, but are stated under point  15 of the text. 

***  Ireland and Luxembourg  do not have shipbuilding industries. 

Note  additionally  that  a dash  indicates  missing  information, whereas  a zero  indicates  no  aid 
or lack of activity. 

12 

Types of aid instrument? 

t 

16. Table  5 gives an overview  of the  use of the various types of aid  instruments 

in the Member States. 

Table 5 

State aid to industry 1992-1994 
Breakdown according to type of aid; in per cent of total industry aid awarded 

Group A 

Grants 

Tax 
exemptions 

Group B 
Equity 
participations 

Group C 

Soft 
loans 

Tax 
deferrals 

in per cent 

Group D 
Guarantees 

TOTAL 

Belgium 

Denmark 

Germany 

Greece 

Spain 

France 

Ireland 

Italy 

Luxembourg 

Netherlands 

Portugal 

United  Kingdom 

37 

94 

41 

54 

86 

46 

79 

42 

93 

78 

72 

87 

45 

2 

25 

20 

0 

19 

6 

38 

0 

13 

21 

6 

1 

0 

0 

0 

0 

12 

8 

14 

0 

0 

0 

0 

9 

3 

21 

13 

12 

5 

3 

5 

7 

2 

1 

2 

B J R 1 2 ( %) 

48 

26 

6 

12 

0 

0 

1 

0 

0 

2 

0 

0 

0 

0 

0 

1 

1 

8 

1 

11 

13 

2 

15 

3 

0 

0 

7 

5 

4 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

8 

100 

Grants  and  tax  exemptions,  which  have  been  classified  in  this  Survey  as 

group  A forms  of  intervention,  are  by far  the  most frequently  used  form of 

aid  in  the  Community.  Within  this  group,  direct  grants  are  more  often 

employed  than  tax  exemptions.  This  can  be  explained  by the  fact  that  the 

former  type  of aid  is  more  flexible  than the  latter.  Since  the  introduction of 

grants  is in general  less  "costly" in terms  of parliamentary  procedures  than 

the  introduction  of changes  to tax  laws, governments  have  a  preference to 

employ the former type of aid. 

13 

17.  Aid  in  the  form  of  state  equity  participation,  classified  under  group  B. 

represents  6%  of  all  aid  to  industry  granted  in  the  European  Union;  the 

figure for this  type  of aid  is  relatively  low  as during the  period  1992 to  1994 

very  few  financial  transfers  in  the  form  of  equity  participation  to  public 

undertakings  including an aid element took place. 

18.  Forms  of  aid  classified  in  group  C,  i.e.  loans  at  reduced  interest  rates  and 

tax  deferrals,  are  an  important  form  of  aid  in  Germany  and  Spain.  Member 

States  generally  avoid  this  form  of  aid  because  it  puts  a  heavy  burden  on 

the  budget.  The  figures  for  soft  loans  represent  only  the  aid  element;  the 

gross  budgetary  resources  necessary  for  these  aids  are  much  higher.  This 

explains  the  low  share  in  industrial  aid  of  this  aid  form  in  the  Community. 

Member  States  prefer  to  reduce  the  cost  of  loans  by  granting  interest 

subsidies. 

Tax  deferrals,  mainly  accelerated  depreciation  and  the  constitution  of  tax 

free  reserves,  is  the  form  which  is  least  used  in  the  Community.  Only 

France, Germany  and the United Kingdom grant support in this form. 

19.  Guarantees,  group  D.  continue  to  be  mainly  used  to  help  in  rescue  and 

restructuring  operations  and  to  foster  the  development  of  small  and 

medium-sized  enterprises.  Although  its  share  in  industrial  aid  is  the  third 

smallest  on  average,  it  is  a  significant  part  of  aid  in  France,  Germany,  and 

Belgium.  The  calculation  of  the  aid  element  of  guarantees  is  particularly 

difficult  and, therefore, they  are, together with the equity  participation, a very 

non-transparent  form of State aid. In this as in previous  surveys,  no  attempt 

has  been  made  to  calculate  the  aid  element  ex  ante  but  instead  current 

expenditure  on  claims  under  past guarantees  has been taken. As  set  out  in 

detail  below  (point  27),  a  different  method  has  been  employed  for  the 

purposes of this  Survey  in the case of Treuhand operations. 

14 

Figure 2 

State aid to industry 
Distribution by tax expenditure and budgetary expenditure 1992-1994 

100% 

90% 

80% 

70% 

60% 

50% 

40% 

30% 

20% 

10% 

0% 

US 

DK 

GR 

IRL 

L 

NL 

? 

UK 

EUR 
12 

g  Budget Expenditure  nTax  Expenditure 

20.  Figure  2  gives  a  breakdown  of  industrial  aid  according  to  the  mode  of 

financing.  Budgetary  expenditure,  which  is  composed  of  grants,  equity 

participation,  soft  loans,  and  guarantees,  is  the  preferred  way  of  financing 

aid  in  the  European  Union.  This  holds  particularly  for  Luxembourg  and 

Spain,  where  all  aid  is  financed  through  the  budget,  and  Denmark,  Ireland, 

and  the  United  Kingdom,  where  more  than  90%  is  financed  through  the 

budget.  By  contrast,  tax  expenditure,  i.e.  tax  rebates  and  tax  deferrals,  is 

used to a large extent  in Belgium, Italy, Germany and France. 

15 

Objectives  of aid 

21.  Aid to  industry  is also  classified  according to the  (broad)  purposes for  which 

it is given and the sector to which it is directed, as follows: 

-  Horizontal objectives9 

-  Research  and  Development 

-  Environment 

- Small and medium enterprises 

- Trade/export 

-  Energy  saving 

- General  investment 

- Other  objectives 

-  Particular  sectors10 

-  Shipbuilding 

- Steel 

- Other  sectors 

-  Regional  objectives 

- Regions falling  under Article 92(3)c 

-  Regions falling  under Article 92(3)a 

- (Only for Germany)  Berlin and Zonenrand aids. 

The classification  of aid is, in many cases, somewhat  arbitrary  because  it is 

necessary to decide which of the objectives declared by a Member  State is 

to  be considered  as the  primary  objective.  In some  Member  States,  aid for 

research  and  development 

is  administered 

through  sector  specific 

programmes,  in  others  aid  to  particular  sectors  is  limited  to  small  and 

medium-sized  enterprises,  etc.  Furthermore,  primary  objectives  cannot 

give a true  picture  of the final beneficiaries: a very  large part of regional aid 

is in fact  paid  to  small  and  medium-sized  enterprises,  aid for  research  and 

development  goes to particular sectors, and so on. 

Consequently,  conclusions  about  changes  from  one  objective  to  another 

over  time  and,  notably,  conclusions  about  differences 

in  objectives 

9 

10 

Training  and  employment  measures  are  excluded.  See  Annex  I,  point  1 4. 

This  category  contains  industry-specific  schemes  and  individual  aid  awards  scrutinized 
by  the  Commission. 

16 

between  Member  States  can  only  be  drawn  with  extreme  caution.  The 

following  Table  6  gives  the  breakdown  of  aid  to  industry  according  to 

objectives  during  the period  1992-1994, and Table 7 indicates  the  changes 

over time for the three main objectives  pursued by the Member  States. 

22. 

It  can  be  seen  from  the  percentages  presented  in Table  6  that  more  than 

50%  of  industrial  aid  in the  Union  is spent  on  regional  objectives.  Amongst 

these aids  more than eight out of every ten ECUs are going to  areas  where 

the  living  conditions  are  particularly  low,  the  so-called  Article  92(3)a 
regions11. 

23.  Aid  granted  for  horizontal  objectives  is  ranked  second.  Amongst  these, 
support  for  research  and  development12  is given  highest  priority.  Although 
it is undeniable that  aids for such horizontal objectives  are in most cases in 

the Community  interest, they  present, nevertheless, the drawback that their 

impact  on  competition  is  often  difficult  to  assess  because  little  or  no 

information  is  available  about  their  sectorial  and  regional  repercussions. 

This  is  the  case  notably  in  their  extreme  form  as  general  investment 

schemes  (still  accounting  for  1,6% of  industry  aid  in the  Community,  down 

from  2,1% in  the  previous  period),  where  the  objectives  are  so  poorly 

defined  that  no  general  judgement  can  be  made  and  the  Commission  is 

bound  to  examine  all  major  cases  of  application.  With  regard  to  the 

functioning  of  the  internal  market,  the  existence  of  such  general  schemes 

is, therefore, increasingly  difficult to justify. 

24.  More  than  15%  of  industrial  aid  in  the  Community  is  spent  on  particular 

sectors.  Having  been  virtually  phased  out  in the  previous  period  under  the 

strict  Steel  Aids  Code  of  1991,  the  Commission  in  1994  took  decisions 

under Article  95  ECSC  that  allow  aid to flow  into the  steel  sector  for  major 

restructuring, as witnessed  by the figures for  1992-1994. 

25.  The  situation  in  each  Member  State  as  regards  the  overall  composition  of 

aid to manufacturing  is as follows: 

- 

In  Belgium,  horizontal  aid  forms  the  bulk  of  spending  (82%)  which  is 

far  above  the  average  in  the  European  Union.  SMEs  and  energy 

11 

12 

A  list  of  these  regions  is  given  in  Annex  I,  point  9.2. 

For  the  reasons  explained  in  Annex  I,  point  1 1 . 1,  the  R&D  figures  contained  in  Table  6 
are  certainly  underestimated. 

17 

saving  are  the  most  notable  horizontal  objectives.  Sector  specific  ajd 

(3%)  is  very  low  whilst  regional  aid  (15%)  is  relatively  high  for  a 

geographically  compact  Member State without any 92(3)a  regions. 

In  Denmark,  the  largest  proportion  of  aid  is  horizontal  (72%)  and 

comprises  essentially  of  R&D  aid  and  aid  for  energy  saving.  The 

sector  specific  aid  (25%)  is  mostly  aid to  shipbuilding.  Regional  policy 

at 3% is not significant. 

In  Germany,  horizontal  aid  accounts  for  15%, which  is  low  compared 

with the average  in the  European Union. Almost two thirds of this aid is 

spent  on  SMEs  and  on  research. Sector  specific  aid  (5%)  is  also  low. 

The  most  important  item  is  regional  aid  (80%), the  overwhelming  part 

of  which  consists  of  92(3)a  aid  for  the  New  Lander  (including  aid 

granted  via the Treuhandanstalt).  This aid has  increased  considerably 

in absolute terms from the previous period reviewed. 

In  Greece  -  regrettably,  the  figures  are  considered  too  unreliable  for 

detailed  comments. 

In  Spain.  40%  of  the  aid  is  spent  for  horizontal  objectives,  mainly  for 

SMEs  and 

for 

research  and  development.  Sector  specific  aid 

represents  43%  of  total  aid  to  industry,  constituting  thus  the  highest 

proportion  of  aid  directed  to  specific  sectors  in  the  Community.  With 

16% regional aid is very low. 

In  France. 44% of  industry  aid  has  horizontal  objectives.  An  important 

volume  of  aid  is  directed  to  specific  sectors  (38%), although  in  certain 
cases  for  R&D  or  in  the  form  of  parafiscal  levies13.  The  increase  in 
spending  on  specific  sectors  accounts  for  the  rise  in  total  French  aid 

figures.  Regional policy  (18%) is less significant. 

In  Ireland,  regional  aid  (73%)  forms  the  bulk  of  spending  and  has 

increased  considerably 

from  the  previous  period  reviewed.  The 

corresponding  increase  in  Ireland's  share  of total  Community  industry 

aid  is  in  line  with  the  Community's  stated  objective  of  increased 

cohesion.  Horizontal  objectives  attract  15%  of  spending  while  11% 

goes to particular  sectors. 

13 

Parafiscal  levies  are  taxes  specific  to  a  sector  which  are  used  to  finance  certain 
operations  in  that  sector. 

18 

In  Italy,  horizontal  aid  accounts  for  27%.  The  most  important  aid 

category  is  regional  aid  (50%).  Almost  all  regional  aid  goes  Into  the 

92(3)a  regions  of the country, the Mezzogiorno. Sectorial aid  accounts 

for 22%. 

In Luxembourg, the most important item is regional aid (70%), followed 

by aid to SMEs (17%) and aid to R&D (8%). 

In the  Netherlands,  horizontal  aid (74%)  is by far the  biggest  item  and 

considerably  larger  than  the  average  in  the  European  Union.  Within 

horizontal  aid,  energy  saving  and  R&D  absorb  most.  Aid  to  particular 

sectors  represent .11 % of total  aid to  manufacturing. As  with  Belgium, 

regional  aid  (15%)  is  relatively  important  for a geographically  compact 

Member  State without any 92(3)a regions. 

In  Portugal,  sector  specific  interventions  at  45%  are  high.  Aid  for 

horizontal  objectives  (29%)  is  almost  exclusively  absorbed  by  general 

investment  and  "other  objectives".  The 

latter  ones  are  mostly 

cofinanced  by  the  Commission  and  are  more  akin  to  the  regional  aid 

given  in 92(3)a  regions because the whole territory of Portugal, as with 

Ireland and Greece, is considered by the Commission  as constituting  a 

92(3)a region. 

In the  United  Kingdom,  regional  aid  (48%)  forms  the  biggest  group  of 

support. The aid  is for the most part spent  in Northern  Ireland which  is 

a  92(3)a  region.  Aid  to  Northern  Ireland  is  in  fact  the  biggest  single 

item  of  industrial  aid  in  the  United  Kingdom.  Horizontal  aid  accounts 

for  35% of which  aid to  R&D is the main  item. Sectorial  aid totals  17% 

of aid to  industry 

19 

Table 6 

State aid to  industry  1992-1994 
Breakdown  of aid according  to sector  and  function 

SECTORS /  FUNCTION 

B 

DK 

D 

GR 

E 

F 

IRL 

I 

L 

NL 

P 

UK 

EUR 12 

Horizontal  Objectives 

82 

72 

15 

60 

40 

44 

15 

27 

30 

74 

29 

35 

30 

Research and Development 
Environment 
SME 
Trade 
Energy saving 
General Investment 
Other  Objectives 

Particular  Sectors 

Shipbuilding 
Other  sectors 

Regional  Objectives 

Regions under  92(3)c 
Regions under 92(3)a 
Germany:  (Berlin/Zonenrand) 

7 
1 
15 
13 
14 
3 
30 

3 

2 
1 

15 

15 
0 

30 
8 
3 
9 
23 
0 
0 

25 

21 
5 

3 

3 
0 

4 
1 
5 
0 
2 
0 
3 

5 

3 
2 

80 

3 
68 
9 

1 
0 
12 
11 
0 
4 
31 

19 

13 
6 

21 

0 
21 

11 
3 
12 
1 
2 
6 
5 

43 

12 
31 

16 

13 
4 

18 
1 
3 
19 
0 
2 
0 

38 

1 
37 

18 

9 
9 

2 
0 
5 
6 
2 
0 
0 

2 
0 
8 
10 
1 
2 
3 

11 

22 

0 
11 

73 

0 
73 

2 
20 

50 

2 
48< 

8 
4 
17 
1 
0 
0 
0 

0 

0 
0 

70 

70 
0 

26 
6 
6 
2 
27 
4 
3 

11 

1 
10 

15 

15 
0 

3 
0 
0 
0 
1 
12 
12 

16 
0 
7 
7 
0 
3 
0 

7 
1 
6 
7 
2 
2 
5 

45 

17 

17 

1 
44 

26 

0 
26 

0 
17 

48 

17 
32 

3 
14 

53 

5 
45 
4 

TOTAL 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

20 

Table 7 

State aid to industry  1990-1992 and 1992-1994 
Breakdown to main objectives 

Horizontal  Objectives 

Particular  Sectors 

Regional  Objectives 

in per cent 

1990-1992 

1992-1994 

1990-1992 

1992-1994 

1990-1992 

1992-1994 

Belgium 

Denmark 

Germany 

Greece 

Spain 

France 

Ireland 

Italy 

Luxembourg 

Netherlands 

Portugal 

United  Kingdom 

EUR 12 

62 

67 

16 

61 

39 

66 

31 

25 

30 

73 

57 

50 

35 

82 

72 

15 

60 

40 

44 

15 

27 

30 

74 

29 

. 

35 

29 

29 

31 

3 

10 

49 

17 

0 

18 

0 

10 

33 

18 

15 

3 

25 

5 

19 

43 

38 

11 

22 

0 

11 

45 

17 

17 

9 

2 

81 

29 

12 

17 

69 

57 

70 

17 

10 

31 

50 

15 

3 

80 

21 

16 

18 

73 

50 

70 

15 

26 

48 

53 

26.  As  regards the  development  over time  of the distribution  of  industrial  aid  amongst 

the  different  main  objectives,  it can  be  seen  from  Table  7  that  at  the  level  of  the 

European  Union  aid  for  horizontal  objectives  has  continued  to  fall  from  40%  in 

1988-90 (see  Fourth  Survey  on State  aid in the  European  Union)  to  35% in  1990-

92,  and  30%  in  1992-94.  The  proportion  of  regional  aid  has  continued  to  rise, 

while  sector  specific  interventions,  following  a  decrease  in  the  previous  period, 

have grown because  of considerable  increases  in France and  Italy. 

The  slight  shift  from  horizontal  objectives  to  sectorial  intervention  does,  from  a 

competition  viewpoint,  cause  some  alarm.  Of  course,  aid  schemes  under  both 

categories  can  be  employed  for  more  or  less  hidden  and  unwanted  purposes  of 

industrial  policy  (support  of  single  companies  as  national  champions  or  protection 

of whole  branches  which  are  allegedly  of vital  national  interest)  and  have,  in  such 

cases, particularly  disastrous  effects  on competition. However,  horizontal  aid given 

to  all  sectors  of  the  economy  is,  with  the  exception  of  the  above  mentioned 

general  investment  aid, less  suitable  for  the  distortive  protection  of  branches  than 
sector specific  interventions. 

21 

Table 8 shows that there  has been a further significant development  in the  rise in 

the  volume  of  aid  granted  to  individual  enterprises,  falling  outside  schemes 

promoting  horizontal,  sectorial  or  regional  objectives.  It  follows  that  a  limited 

number  of 

individual  aids  of 

important  volume  are 

responsible 

for  a 

disproportionate  part of total aid granted; The part of such "ad hoc" aid in the total 

aid to European  industry  has increased from 7  per cent in 1990 to 36  per cent in 

1994.  It  consists,  in  the  main,  of  aid  granted  for  rescue  and  restructuring  of 

companies together with aid granted by the Treuhandanstalt. 

Table 8 

State aid to industry in the Community 1990-1994 
Annual values in constant prices (1993) 

1990 

1991 

7992 

1993 

1994 

Million ECU 

Amounts including "ad hoc" 
cases 

43777 

39827 

41196 

43890 

42830 

Amounts excludina "ad hoc" 
cases 

40614 

34690 

34282 

31821 

27344 

"Ad  hoc" cases  as a 
percentage of  overall 
industry  aid 

7 

13 

17 

27 

36 

22 

Carman State aid to the new  Lander 

27.  The  unification  of  the  Federal  Republic  of  Germany  has  been  of  particular 

importance  for  Community  State  aid  policy.  Two  German  States  having  totally 

different  economic  systems  have  been merged: on the one  hand, a  decentralized 

market economy  based essentially  on private enterprise and, on the other  hand, a 

centrally  planned  economy  under  State  control,  having  resulted  in  insufficient 

infrastructure  and uncompetitve enterprises. 

The  integration  of  the  centrally  planned  East  German  economy  into  the  internal 

market  has been facilitated  by certain  aid measures which  are  presented  in Table 

A3  in Annex  II. From  1992 to  1994 aid to industry in favour of the  new  Lander has 

attained  a yearly  average  volume  of more than  ECU  13 250  million,  up from  ECU 

6 600 million  in the  previous  period  (or 76% of the whole volume  of aid to  industry 

in Germany,  up from 47% in the  previous  period). The granting  of  aid to  the  new 

Lander  has  been  partly  compensated  by  a sharp  decrease  in  aid  to  old  German 

Lander which  has fallen from  ECU 8 500 million for the period  1988-1990 to  ECU 

7 400 million for  1990-1992, and ECU 4 150 million for  1992-1994. 

In  the  context  of  privatizing  the  former  state-owned  companies,  aid  during  the 

period  under  review  was  also  granted  via  the  Treuhandanstalt  (THA),  the  State 

holding  company  set  up  to  administer,  adapt,  and  privatize  former  East  German 

public  undertakings.  As  laid  down  in  the  Commission's  decisions  of  1991  and 

1992 on the  interventions  of the THA,  some  of these  interventions  can  constitute 

aid.  This  was  usually  the  case  where  the  THA  issued  guarantees  for  loans 

granted  by  the  banking  sector  at  market  rate  to  its  generally  poor-ranking 

undertakings.  Equally,  the  THA  itself  borrowed  at  market  rate  and  then  awarded 

loans to its undertakings  at the same rate. 

Due  to  the  method  used  for  the  assessment  of  aid  elements  in  guarantees  (see 

Annex  I)  the  aid  element  in  guarantees  only  appears  in  the  Survey  once  the 

guarantees  have  to  be  honoured.  Similarly,  an  aid  for  loans  at  market  rate  only 

appears  if  and  when  those  loans  are  waived  and  therefore  transformed  into 

grants.  In the case  of the THA, the  Commission  is of the  opinion  that this  method 

undervalues  the  aid element  in the guarantees and  loans  awarded  by the  THA  in 
the  period covered  by the  Fifth  Survey. The risk that the  buyer  of  companies  held 

by  the  THA  will  not  take  over  the  whole  of the  loans  awarded  or  guaranteed  by 

the  THA  is  very  real  and  increases  over  the  years.  If  the  buyer  submitted  the 

highest  bid,  further  to  an  open  and  unconditional  call  for  tender,  the  price  -

including the waiving  of  loans - cannot  be said to involve any  aid. As  a result, any 

23 

aid  elements  in  the  guarantees  and  loans  provided  by  the  THA  before  the 

privatisation  of such companies would  never appear  in the report. An  exception to 

the method  referred to above is therefore called for in the case of the THA. This is 

also  warranted  by  the  fact  that  the  sale  of  companies  to  parties  other  than  the 

highest  bidder  does  involve  aid,  which  can  however  only  be  quantified  after  a 

thorough  analysis  of  each  sales  contract.  In  view  of  the  sheer  number  of 

companies  sold,  the  Commission  does  not  possess  the  resources  to  carry  out 

such an analysis. Only for companies above the notification thresholds  decided  by 

the  Commission  in  December  1992  has  such  an  analysis  been  made;  for  those 

cases the aid element  in the sale is known and does appear in this  Survey. 

In the  period  covered  by the  present  Survey  the THA  issued  guarantees  totalling 

ECU  28  432  million  and  awarded  loans  amounting  to  a  total  of  ECU  41  086 

million. Based on its experience with THA-cases, the Commission  is of the  opinion 

that  20%  of  these  amounts  can  be  regarded  as  aid,  which  are  included  in  the 

Survey.  In  addition,  grants  totalling  ECU  6  668  million  in  order  to  finance  social 

plans need to be included  in their totality. 

PART II - OVERALL  NATIONAL AID  IN THE MEMBER  STATES 

Aid to sectors other than  industry 

28.  The following  gives  an overview  of  State  aid granted  in the  agriculture,  fisheries, 

transport,  and  coal  mining  sectors  on  the  basis  of  available  information.  The 

totality  of aid awarded  in these four  sectors together with that  discussed  in  Part I 

of  this  Survey  would  constitute  the  overall  national  State  aid  in  the  twelve 

Member States. Unfortunately, due to the fact that some Member  States  have not 

been  able  to  supply  complete  information  in  all  of  these  sectors,  the  overall 

amount  is not a sufficiently  viable figure and therefore  interpretation  of data  given 

in this section must be made with utmost caution. 

Aid to  agriculture 

29. 

In sectors  such  as  agriculture  where  a  highly-developed  Community  policy  is  in 

operation, the  limits for  granting  State  aid are, to a greater  extent,  determined  by 

this  common  policy.  Thus,  although  Articles  92-94  of  the  EC  Treaty  apply  in 

principle  to  agriculture  as  to  other  sectors  of  the  economy,  Article  42  specifies 

that  the  extent  to  which  these  articles  apply  to  agriculture  should  be  decided  by 

the  Council.  Hence  the  Council  has  limited  Member  States'  freedom  to  grant 

State aid in certain areas of policy: 

24 

(i) 

Support  of  markets  in  most  agricultural  products  (Council  Regulations 

governing the common market organisations). 

Aid,  using  exclusively  Community  (i.e. EAGGF)  resources/is  payable  only 

on the basis  of Council  rules which provide inter alia for a common  system 

of  intervention  buying  and  export  refunds  and,  further  to  the  reform 

decisions  of  May  1992, compensatory  aid  in the  various  sectors  for  price 

reductions  in conjunction with compulsory set-aside. 

(ii) 

Support  for  improving  farm  structure  (Council  Regulation  (EEC)  No 

2328/91). 

Aid  concerning  productive 

investments  on  agricultural  holdings 

is 

determined  to  a  large  extent  by  the  provisions  of  the  above-mentioned 

Council  Regulation  and partly Community cofinanced. 

The  reporting  situation  in  the  field  of  agriculture  is  not  satisfactory.  Several 

Member  States  have  failed  to  deliver  to  the  Commission  comprehensive 

information  on  their  aid  expenditure  in  this  sector.  Until  the  previous  (4th) 

Survey,  the  Commission,  when  faced  with  this  situation,  made  extrapolations 

and estimates  in order to close the gaps.  In the  present  Survey,  in contrast,  the 

gaps  are  left  intact  and  only  available  data  are  used  for  the  two  periods 

1990-1992 and  1992-1994. 

Taking  account  of  the  data  situation,  Table  8  relates  total  State  aid  (including 

the  national  contribution  to  the  socio-structural  measures  under  (ii)  above)  in 

respect  of  products  listed  in  Annex  II  of  the  EC  Treaty  -  plant  and  livestock 

production  and  primary  processing  activities  -  to  gross  value  added  of 

agricultural  production  at  the  level  of  the  holding.  It will  be  noted  that  national 

aid  taken  into  account  in  this  table  applies  to  a  broader  spectrum  of  activities 

than  the  base  retained  for  gross  valued  added.  Data  covering  the  whole 

reporting  period  were  available  from  four  Member  States,  whilst  data  covering 

only a part of the  period were available from four others. No data were  available 

from the  remainder. 

25 

Table 9 

National aid in respect of products listed in Annex II of the EC Treaty as a percentage of gross 
value added of agricultural production in 1990-92 and 1992-94. 

1 Q 9 0 1 9 g2 

-, 

1992-1994 

per cenl 

Belgium 

Denmark 

France 

Germany* 

Greece 

Spain 

Ireland 

Italy 

Luxembourg 

Netherlands 

Portugal 

United Kingdom 

EUR 12 

ÏTë 

5,4 

11,0 

20,9 

0,04 

N.A 

N.A 

N.A 

N.A 

4,6 

13,4 

8,2 

HA 

9l> 

4,8 

N.A. 

27,2 

N.A 

N.A 

N.A 

N.A 

N.A 

N.A 

N.A 

6,4 

NA~ 

German agriculture aid figures include aid in the form of VAT concessions (VAT plus per hectare 
aid) awarded  in compensation  for  price reductions flowing from agri-monetary  changes. Of the 
total shown, some 10 percentage points of gross value added are accounted for by this aid. 

This table should be read in conjunction with point 29 (above) and point III.10.2 of the Technical 
Annex. 

It  may  be  noted  that  the  concept  of  total  national  aid  encompasses  individual 

categories  of  aid  which  may  present  differing  levels  of  relevance  in  terms  of 

competition  policy.  Therefore,  it  may  be  argued  that  aid for  measures  such  as 

productive  investment  and  publicity  is  more  likely  to  potentially  have  an  effect 

upon  trade  than  aid  which  is  destined  simply  to  compensate  operators  for 

services  rendered, for  example,  access to the countryside  and  aid to  offset  the 

financial  burden  of  natural  disasters. A broadly  similar  argument  might  apply  to 

aid  financed  by  certain  parafiscal  taxes  where,  though  such  aid  from  a  legal 

viewpoint  is  considered  as  State  aid,  the  economic  burden  falls  exclusively 

upon the beneficiaries  themselves. 

Further,  it should  be  noted  that the  data  in Table  9 do  not  provide  an  accurate 
picture of the total  level of support granted to agriculture  in the Community  or in 
any particular  Member  State. Only a limited  part of this total  is accounted for  by 

the  data  in  the  table.  The  annual  publication  by  the  Commission  entitled  "The 

26 

Agricultural  Situation  in the  Community" provides data inter alia on Community 

aid for agriculture. 

Thus  it  may  be  concluded  that  caution  must  be  exercised  in  drawing 

conclusions  concerning  the  possible  impact on trade from the  data  in Table 9, 

or  indeed  from  any  data  relating  to  global  volumes  of  aid  in  agriculture,  (see 

Annex I, Section III for details). 

Aid to fisheries 

30. 

In  the  fisheries  sector,  national  aids  closely  follow  the  development  of  and  the 

limits imposed by the Common Fisheries Policy (CFP) thereby contributing to the 

realization  of  common  objectives.  Any  conclusion  to  be  drawn  from  the 

quantification  of  national  aids  has,  therefore,  not  only  to  take  account  of  their 

impact on competition but also of their impact on attaining a common aim. 

Tables  10 and  11 show national aids and Community intervention  in favour of the 

Community's  fishing  fleet,  the  commercialization,  and  first-stage  processing  of 

the  products.  It  has to  be  noted that the data  situation  in the fisheries  sector is 

precarious  as  data  from  several  Member  States  were  not  received  in  time  for 

publication. 

27 

Table 10 

Aid  to  fisheries  in  per  cent  of  gross  value  added*  in  this  sector,  calculated  on  the  basis  of 
quantities landed and average  prices 1990-1992 and 1992-1994 

1990-1992 

I 

1992-1994 

per cent 

Belgium 

Denmark 

Germany 

Greece 

Spain 

France 

Ireland 

Italy 

Luxembourg 

Netherlands 

Portugal 

United Kingdom 

EUR  12 

. 

T$ 

2,9 

10,8 

0,3 

3,3 

4,3 

11,1 

8,6 

0,6 

1,7 

2,9 

5^ 

3^0 

N.A. 

14,2 

0,2 

5,3 

N.A. 

9,0 

10,0 

N.A. 

N.A. 

3,7 

N.A 

Value added figures  used exclude transformation  industry and on-shore production. 

28 

Tabte11 

Community interventions in the fisheries sector in the framework of the common organisation of 
the market and structural policy 1990-1994. 

1990 

1991 

1992 

1993 

Million ECU 
1994 

Guarantee 

23,6 

26,2 

32,1 

32,4 

35,5 

Guidance 

226,6 

294,0 

358,4 

401,8 

391,0 

Aid to transport (railways^ 

31.  Table  12  shows  aid  to  railways  as  a  percentage  of  value  added  in  this  sector. 

Whilst  most aid  is given  to  compensate  for the  imposition  of social  obligations  or 

inherited  liabilities  on  railways  (Council  Regulation  1191/69,  as  amended  by 

Council  Regulation  1893/91,  and  Council  Regulation  1192/69)  aid  in  percent  of 

value added  remains  high.  However,  as figures for aid and value  added were  not 

always available these figures should be interpreted with caution. 

It  should  be  noted  that  whilst  all  Member  States  have  systematically  provided 

data  on  aid  granted  in  this  sector,  not  all  data  were  available  in  time  for 

publication.  For  the  three  countries  concerned, their  1992 figures  were  taken  for 

1993 and 1994. 

29 

Table 12 

State  aid  to  transport  (Railways)  in  percent  of  gross  value  added  in  railways*  1990-1992  and 
1992-1994 

1990-1992 

1992-1994 

in per cent 

Total aid 

Reg.  1191/2-69 

Total aid 

Reg.  1191/2-69 

Belgium 

Denmark 

France 

Germany 

Greece 

Ireland** 

Italy 

Luxembourg*** 

Netherlands** 

Portugal 

Spain 

United  Kingdom 

EUR 12 

42,8 

13,3 

26,0 

33,0 

6,04 

14,4 

34,6 

87,4 

16,6 

6,9 

24,1 

5,0 

24,4 

30,8 

8,5 

15,8 

22,0 

0,21 

7,0 

11,3 

81,2 

11,6 

5,0 

2,5 

5,0 

40,7 

N.A. 

N.A. 

47,2 

6,03 

12,3 

N.A. 

81,1 

10,1 

5,5 

20,6 

6,8 

18,2 

N.A. 

N.A. 

12,9 

0,17 

6,5 

N.A. 

79,1 

4,8 

4,0 

1,0 

6,8 

12,8 

25,9**** 

Q  7 * * ** 

* 

** 

*** 

Gross value added was not available for all countries in all years. Lacking data were estimated. 

Aid  figures  expressed  as  percentage  of  value  added  in whole  transport  sector  as  no  separate 
figures are available for railways. 

A  considerable  part  of  the  expenditure  under  Regulation  1192/69  in  this  Member  State  is  for 
retirement. 

**** 

1992 data were  used for the three  Member  States who did  not  provide  information  for  1993 and 
1994 in time for publication of this survey. 

N.A.  Whilst  all  Member  States  make  every  effort  to  provide  data,  three  did  not  do  so  in  time  for 

publication. 

30 

/m to coaJ mining 

32.  Table  13  gives  the  aid  to  coal  mining  divided  into  aid  not  going  to  current 
production and aid granted to current production. The latter is expressed in ECU 
per  person  employed  in  the  industry  and  as  the  share  of  the  total  aid  to  the 
sector. The general trend in the coal producing Member States is for an increase 
in the amount of aid per person employed compared to the previous period. After 
halting  all  aid  to  current  production  during  the  period  1990-1992  the  United 
Kingdom saw a minuscule  amount of aid to current  production  in  1992-1994 as 
draconian restructuring of the industry took place prior to privatisation. In Belgium 
the last colliery closed in the summer of 1992 and in Portugal at the end of 1994. 

Table 13 

Aid to the coal  industry 

Yearly  average  of aid not 
destined to current 
production  in Million  ECU 

Yearly  average 
of aid destined to current  production 

1990-92* 

1992-94** 

1990-1992* 

1992-1994 

ECU per 
employee 

in % of 
total aid 

ECU per 
employee 

in % of 
total aid 

Belgium 
Germany 
Spain 
France 
Portugal 
United 
Kingdom 

790,0 
4.542,7 
937,1 
3.145,1 

39,6 

473,5 
3.334,6 
660,8 
2.053,7 
1,5 
298,4 

27.949 
39.846 
16.272 
9.045 
7.579 

7% 
50% 
37% 
5% 
100% 

***51.807 
17.145 
13.651 
10.884 
280 

62% 
44% 
10% 
76% 
2% 

TOTAL 

9.454,5 

6.822,5 

23.464 

36% 

34.700 

48% 

in 1993 prices 
Following  Commission  Decision  3632/93/ECSC,  from  1994  figures  on  the  financing  of  social 
benefits are no longer  included  by the Commission in its annual report on aid in this  sector. 
The  1994  figures  for  aid  to  current  production  for  Germany  include  an  exceptional  financial 
measure  of  DM  5  350  million  to  clear  the  debts  of  the  compensation  fund  as  they  stood  at  the 
end of 1993. 

31 

After  declining  in  the  previous  period  the  share  of  aid  going  to  current 

production  has  risen  considerably  from  36%  of  the  total  aid  for  the  period 

1990-92  to  48%  during  the  period  1992-94  (a tendency  which  persists  even  if 

the financing  of social  benefits  had  been  included  in the  1994  aid  figures).  The 

average  aid,  destined  to  current  production,  per  employee  in  the  industry  has 

risen from 23  500  ECU in  1990-1992 to 34 700 ECU in 1992-94. This  is at odds 

not  only  with  the  objectives  of  the  restructuring  and  rationalisation  of  the 

Community  coal industry  but also with the establishment  of the single  market. 

Of the aid not going to current  production, the majority  is to cover the social and 

redundancy  costs  resulting  from  the  contraction  of  the  industry.  The  average 

number  of  employees  in  the  sector  had  decreased  to  154  500  in  1994, 

compared  with  215  500  in  1992  and  270  000  in  1990, with  the  most  important 

reductions  occurring  in the  United Kingdom, Germany and Spain. 

In the  case  of  Germany  and  Spain, a coal  reference  price  system  has  been  in 

operation  for  a  number  of  years  which  keeps  domestic  prices  net  of  subsidies 

considerably  above  world  market  prices.  Although  such  a  measure  has  an 

effect  equivalent  to  an  aid,  it  cannot  be  reflected  by the  usual  indicators  which 

are  shown  in Table  12. Therefore,  the figures  should  be taken  as  an  overview 

and not an accurate  indicator  of the protection afforded  by aid. 

The  new  Community  framework  Decision  3632/93/ECSC  on  State  aid  to  the 

coal industry  has tightened the definition of aid to cover: 

•  any  direct  or  indirect  measure  or  support  by  public  authorities  linked  to 

production,  marketing  and  external trade which, even  if  it  is  not  a  burden  on 

public  budgets,  gives  an  economic  advantage  to  coal  undertakings  by 

reducing the costs which they would normally  have to bear; 

• 

the  allocation,  for  the  direct  or  indirect  benefit  of  the  coal  industry,  of  the 

charges  rendered  compulsory  as a result of State intervention; 

•  aid  elements  contained  in  financing  measures  taken  by  Member  States  in 

respect  of  coal  undertakings  which  are  not  regarded  as  risk  capital  provided 

to a company  under  standard  market-economy  practice. 

32 

To  increase transparency,  Member  States are also required to enter  aid in their 

"national,  regional  or  local  budgets  or  channelled  through  strictly  equivalent 

mechanisms"  after  a  transitional  period  not  exceeding  December  1996. All  aid 

received  by  coal  undertakings  has  to  be  shown  together  with  their  profit  and 

loss accounts  "as a separate  item of revenue, distinct from turnover"  from  1994 

onwards. 

Finally,  operating  aid  is  defined  as  "the  difference  between  production  costs 

and the selling  price freely  agreed  between the contracting  parties  in the  light of 

the conditions  prevailing  on the world market". The  new  Decision  stipulates  that 

"arrangements  existing  at  31  December  1993,  under  which  aid  was  granted  in 

conformity  with  the  provisions  of  Decision  2064/86/ECSC  and  which  are  linked 

to  agreements  between  producers  and  consumers,  exempted  under  Article 

85(3)  of the  EC Treaty  and/or  authorised  under Article  65  of the  ECSC  Treaty, 

must  be  modified  by  31  December  1996"  to  bring  them  into  line  with  the 

provisions  of  the  new  Decision  3632/93/ECSC.  For  some  Member  States,  this 

will result  in an  increase  in aid amounts as the coal reference  price systems  are 

abolished. 

33. 

For  both  railways  and  coal  the  observed  aid  amounts  are  high.  Whilst  there 

may  be  only  limited  competition  between  the  coal  industries,  the  impact  of 

these  aids  on the wider  markets  in transport  and energy  cannot  be  ignored. As 

these  markets  are  becoming  integrated  with  the  completion  of  the  single 

market, competition  is becoming  increasingly  important. The declared will of the 

Community  to  open  up the transport  and the energy  markets  render  a strict  aid 

control  policy  by  the  Commission  in  these  sectors  more  and  more  important. 

The Survey  will,  in future,  have to  contain  data  on forms  of transport  other  than 

railways  (and  the  aviation  sector,  covered  in section  2.2.5.:  Other  sectors)  and 

forms  of  energy  other  than • coal  in  order  to  provide  a  basis  for  the  full 

assessment  of  the  impact  of  aids  in  these  sectors.  In  the  transport  sector, 

however,  the  assessment  of  distortions  of  inter-modal  competition  is  made 

more  difficult  by  the  question  of  imputing  infrastructure,  environmental,  and 

surveillance  costs. 

33 

Volume of overall aid in the  Community 

34.  The  volume  of  State  aid  in the  Community,  given  in the  sectors  covered  by  this 

survey  and  taking  due  account  of the  incompleteness  of data  described  above, 

amounts  on  average  over  the  period  1992-94 to  ECU  95  200  million,  as  can  be 

seen  from  Table  14.  Because  of  missing  data  on  some  Member  States' 

expenditure  in the agricultural sector the total aid amounts are underestimated. 

Table 14 

Overall national aid14  1990-92 and 1992-9415 
In constant  1993  prices 

1990-1992 

1992-1994 

Million  ECU 

Overall national aid 

96 600 

95 000 

Table  15  shows  Member  States'  total  aid  expenditure  as  a  percentage  of  gross 

domestic  product,  per  person  employed,  and  relative  to  total  government 

expenditure.  It should  be  noted  that  in the  case  of the  Member  States  for  which 

figures  on the expenditure  in agriculture were  not available, or were  only  partially 

available, the  ratios are underestimated. 

14 

15 

For  fisheries  and  transport  most  recent  data  available  were  used  where  information  for 
either  1993  or  1994  was  not  obtainable  in  time  for  the  publication  of  this  survey.  For 
agriculture  only  the  available  data  were  used. 
Comparisons  between  the  two  periods  should  take  into  account  the  changed  approach 
on  data  for  the  coal  sector  in the  latter  period  (explained  on  page  33). 

34 

Tattle 15 

Overall State aid In the  Member States  1990-1992 and 1992-1994 in per cent of  GDP, per  person 
employed, and relative to government expenditure 

in per cent of GDP 

in ECU per person 
employed 

in per cent of total 
Government 
Expenditure 

1990-1992 

1992-1994 

1990-1992* 

1992-1994 

1990-1992 

1992-1994 

Belgium 

Denmark 

Germany 

Greece** 

Spain** 

France** 

Ireland** 

Italy** 

Luxembourg** 

Netherlands** 

Portugal** 

United  Kingdom 

EUR 12 

2,9 

1,0 

2,4 

1,9 

1,3 

1,7 

1,2 

2,4 

2,4 

0,9 

1,5 

0,5 

1,8 

2,0 

1,0 

2,6 

1,7 

1,2 

1,4 

1,5 

2,3 

2,1 

0,8 

1,2 

0,4 

1,7 

1.369 

435 

1.273 

366 

407 

806 

411 

867 

958 

492 

1.476 

318 

379 

664 

530 

844 

1.220 

1.087 

458 

220 

162 

714 

401 

185 

142 

713 

5,2 

1,7 

5,1 

4,0 

2,9 

3,3 

3,1 

4,5 

4,8 

1,7 

3,6 

1,3 

3,6 

3,5 

1,7 

5,4 

3,5 

2,4 

2,5 

3,6 

4,1 

4,0 

1,4 

2,6 

1,0 

3,3 

1990-1992 averages in 1993 prices 
These countries supplied no or incomplete data on aid in agriculture 

Budgetary  impact of aids 

35. 

In  Belgium,  the  financing  of  State  aid  is  equivalent  to  3 1% of  the  high  budget 

deficit  amounting  to  6,3%  of  GDP  in  1992-94.  In  Germany,  where  the  budget 

deficit  in  1992-94  was  2,9%  of GDP, the financing  of  State  aid  is  equivalent  to 

88%  of  the  deficit  for  the  period.  Finally,  in  Italy,  where  the  budget  deficit  is 

around  9,5%  of  GDP  in  1992-94,  the  financing  of  the  overall  aid  amount 
accounts  for  24%  of  the  deficit  (for  the  reasons  explained  above,  the  Italian 

overall aid figure  is  underestimated, resulting  in an  underestimation  of the  ratio 

of the  financing  of  the  aid  to  the  budget  deficit).  Compared  with  the  preceding 

period,  there  has  only  been  a  marginal  decrease  in  the  budget  deficit  in  Italy 

while  the  share  of  the  deficit  necessary  for  financing  the  aid  has  remained 

constant. 

35 

Table 16 

Overall State aid in the Member States 1990-92 and 1992-94 broken down into main sectors 

in per cent of overall aid 

Agriculture and Fisheries 

Manufacturing 

Transport 

Coal 

Total 

1990-1992 

1992-1994 

1990-1992 

1992-1994 

1990-1992 

1992-1994 

1990-1992 

1992-1994 

1990-1992 

1992-1994 

7 

19 

10 

7 

13 

10 

45 

31 

38 

37 

41 

41 

30 

' 

50 

24 

41 

46 

29 

18 

0 

28 

14 

0 

21 

Belgium 

Denmark 

Germany 

Greece* 

Spain* 

France* 

Ireland* 

Italy* 

Luxembourg* 

Netherlands* 

Portugal* 

United Kingdom 

18 

15 

58 

40 

23 

37 

0 

8 

EUR 12(%) 

-

-

-

-

-

-

-

-

These countries supplied no or incomplete data on aid to agriculture 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

100 

36 

RESULTS 

t 

36.  With  the  publication  of  this  Fifth  Survey  on  State  aid  in the  European  Union, the 

Commission  and  the  Member  States  reaffirm  their  commitment  to  increasing 

transparency  in the field of public support to the economy. The document  contains 

a  detailed  analysis  of the  volumes  of  national  aid, broken  down  into  the  different 

forms  and  the  various  objectives  pursued  by  Member  States.  The  data  that  was 

collected  and  analyzed  serve  the  Commission,  by  making  available  a  sound 

statistical  basis,  in  its  continuous  endeavour  to  improve  its  State  aid  policy.  The 

Survey  serves,  furthermore,  the  Community  in  the  wider  international  context  by 

reflecting, in a coherent and transparent way, the determined will of the  Community 

to  eliminate  distorting  aid that  is  incompatible with the  internal  market  and to  keep 

overall aid  levels  under  control. It thus  underlines the Community's  commitment  to 

a free world market. 

37.  As  regards aid to industry, the figures available lead to the general conclusion  that 

the gradual downward trend observed in the past appears to have come to an end. 

This survey  indicates  a stable tendency  in the overall volume.  In the  period  under 

review, the annual  aid volume  amounts to almost 43 billion ECUs. 

The apparent  stable trend  of the overall volume of industry  aid  is in fact due to the 

decrease  in  aid  levels  seen  in  eight  of  the  Member  States  being  offset  by  an 

increase in aid in the four others. 

Of these four,  one  is faced with an unprecedented  adjustment  process  in  adapting 

a  part  of  its  economy  to  the  market  system  and  another  has  carried  out  several 

exceptional  restructuring  operations. 

In  the  two  other  countries  where  aid 

increased,  this  increase  can  be  attributed  to  a  large  extent  to  specific  objectives 

such as energy saving and regional development. 

Budgetary  expenditure  is the  preferred form of awarding  State aid to  industry  in all 

Member  States.  This  is  to  be  welcomed  in  the  sense  that  financing  through  the 

budget is more transparent than the alternative of financing through the tax system. 

37 

As to the objectives  pursued with industry aid, a shift away from horizontal  support 

to sector specific - particularly  rescue and restructuring - and regional  interventions 

can be observed. The  latter  is a welcome trend, whereas the former  causes  some 

alarm under  competition  aspects  as aid to single companies  or whole  branches  of 

industry  are  amongst  the  most  distortive  for  competition.  Horizontal  aid  has 

decreased from  35 to  30  per  cent, while  regional spending  has  increased  from  50 

to 53 per cent and sector specific spending from 15 to 17 per cent. 

38.  The most marked trend, however,  can be observed  in the rise in the volume of aid 

granted  to  individual  enterprises,  falling  outside  schemes  promoting  horizontal, 

sectorial or regional objectives.  It follows that a limited number of individual  aids of 

important  volume  are  responsible  for  a disproportionate  part  of  total  aid  granted. 

The part of such "ad  hoc" aids in the total aid to European  industry  has  increased 

from  7  per  cent  in  1990  to  36  per  cent  in  1994.  It  consists  in  the  main  of  aid 

granted  for  rescue  and  restructuring  of  companies  together  with  aid  granted  by 

the  Treuhandanstalt. 

39.  As  regards  overall  national  aid  to  the  economy,  the  figures,  in  so  far  as  they  are 

available  to  the  Commission,  confirm  the  conclusion  of the  previous  Surveys  that 

the  volume  of  aid  in the  Community  is  massive.  It should  not  be  forgotten  in  this 

context that Article  92(1)  of the  EC Treaty, which  is the  basis  of the  Commission's 

State aid policy,  contains  a general  ban on aid and that  State aid  is only  approved 

where  one  of  the  derogations  set  out  in  Article  92  applies.  The  Commission,  of 

course,  approves  aid  for  many  purposes  where  these  are  deemed  to  be  in  the 

common  interest.  Examples  of  such  aid  for  which  the  Commission  has  clearly  a 

favourable  view  include  regional,  R&D,  SME,  training  and  environmental  aid. 

However  it  cannot  be  denied  that  the  piling  up  of  State  aid  interventions  risks  to 

jeopardise the efficient functioning  of the internal market. 

38 

CONCLUSIONS 

40. 

The  first  four  surveys  which  the  Commission  published  on  the  aid  volumes 

awarded  by  the  Member  States  of  the  European  Union  to  their  companies, 

showed  a  slow  but  continuing  downward  trend  of  the  overall  level  of  aid  to 

industry. This tendency  is not confirmed  by the findings of the  Fifth  Survey. This 

survey  indicates  a  stable  tendency  in  the  overall  volume  which  is  situated 

around an annual  average  of almost 43  billion  ECUs  representing  4  per cent  of 

value  added  in  industry  or  more  than  14Ô0 ECUs  per  person  employed  in  this 

sector.  This  is  a  worrying  result.  As  well  as  being  a  source  of  distortion  of 

competition, the  observed  high  levels  of State  aid  risk to  endanger  the  efficient 

functioning  of  the  internal  market.  In  addition,  the  advancing  integration  and 

reinforcement  of  competition  in the forthcoming  Economic  and  Monetary  Union 

will  increase  the  sensitivity  of  companies  towards  aid  that  benefits  their 

competitors.  This  situation  will  certainly  induce  the  Commission  to  look  for 

means  that  could  further  increase  the  efficiency  and  the  strictness  of  its  State 

aid control. 

41. 

The  case  by  case  examination  practiced  by  the  Commission  in  order  to  verify 

the  conformity  of  an  aid  with  the  rules  laid  down  in  the  Treaty  is  aimed  at 

ensuring  that  the  aid  does  not  breach  the  level  necessary  with  respect  to  the 

market  imperfections  and  that  its  contribution  to the  realization  of  objectives  of 

Community  interest  counterbalances  the  related  effects  on  the  distortion  of 

competition  and 

trade.  This  examination  however  does  not  give 

the 

Commission  the  possibility  to  take  into  account,  during  the  analysis  of  an  aid, 

those  aids  that  have  already  been  granted  in the  same  Member  State  to  other 

companies,  possibly to attain other objectives. Therefore, based on  Competition 

rules alone the Commission  has only relatively  limited means to act directly  with 

a view to  limiting  the  overall  budgets that the  Member  States  devote  to  support 

their  companies.  The  Commission  has  however  already  taken  action  and this  is 

confirmed  by certain  recent orientations of the Commission's  policy with regard to 

State aid. In 1996 the Commission took a record number of 23 negative decisions 

which systematically  required, when the aid in question  had already  been  paid in 

violation of the  procedural  rules, the recovery of the aid by the  Member  State, as 

39 

well  as  interest  counted  from  the  date  of  payment.  In  view  of  the  market 

efficiencies forgone  because of the high amount of aid, Commission  action  alone 

is  not  sufficient.  A  dialogue  with  all  the  Member  States  with  a  view  to  fixing 

precise  objectives  and  a  timetable  for  reducing  overall  aid  budgets  appears 

therefore as a necessary complement to the Commission actions. 

42. 

The  disparities  between  the  different  countries  in  the  award  of  aid  to  industry 

remain  important.  As  regards  the  cohesion  countries,  the  increase  of  aid 

observed for  Ireland - its share in total industry aid rose from 0,8 to  1,1 per cent -

is  offset  by  the  continuing  decrease  of  aid  seen  in  the  other  three  cohesion 

countries  Spain,  Portugal  and  Greece.  The  growing  disparity  between  the 

cohesion countries and the central economies  is at variance with the  objective  of 

cohesion  and  risks  endangering  the  effectiveness  of  the  Community's  own 

funds  used  to  assist  these  Member  States  in  closing  the  gap  in  their  level  of 

development  vis-à-vis  the  rest  of  the  Community,  as  is  also  pointed  out  in  the 

first  Cohesion  Report  (COM(96)542).  Furthermore,  the  problem  of  unbalanced 

development  in the  award  of  aid  between  different  regions  should  no  longer  be 

seen  solely  as  an  internal  cohesion  problem. The  problem  is  clearly  aggravated 

when account  is taken  of the forthcoming  enlargement.  Only  by strengthening  its 

State  aid policy  and  by securing  a greater  balance  of  aid  between  the  different 

regions  of  the  Community  can  the  Commission  prevent  the  negative  effects  of 

the diverging trend on economic convergence. To further  reinforce the  objective 

of  reducing  the  above-mentioned  disparities, the  Commission  is  preparing  new 

regional  aid  guidelines  which  envisage  a gradual  reduction  in  aid  intensities  in 

article  92(3)c  areas  and,  a  closer  correspondence  between  aid  intensities  and 

the socio-economic  conditions  prevailing across all of the assisted  regions. 

43. 

Such  a  control  policy  also  calls  for  further  increases  in  aid  transparency.  It  is 

therefore  crucial that the  new  standardised  annual  reporting  system  be  enforced 

thereby  allowing  the  Commission  to  have  a  clearer  picture  of  the  regional  and 

sectorial  impact  of the  different  forms  of government  support to  industry,  notably 

in the case of aid with a horizontal objective. 

40 

44.  Aid,  granted  for  horizontal  objectives,  which  is  decreasing,  concerns  for 

example,  research  and  development,  small  and  medium  sized  enterprises,  the 

protection of the environment  and energy saving. This aid therefore  conforms to 

the  criteria  published  in  horizontal  frameworks.  Whereas  the  objectives  of 

economic  cohesion  and  undistorted  competition  in the  internal  market  require a 

reduction  in  volumes  of  aid,  it  should  also  be  kept  in  mind  that  European 

industry  is equally  confronted with international competition. The  aid, devoted to 

encourage  firms  to  undertake  greater  efforts  in  the  field  of  research  and 

development  and  in training  their  personnel  or to  help small  and  medium  sized 

enterprises  to  overcome  their  difficulties  in  obtaining  the  sources  of  finance 

necessary  for  their  development,  can  contribute  to  the  reinforcement  of  the 

competitiveness  of  European  industry.  Moreover  the  positive  externalities  linked 

to  investments  in environmental  protection  can justify  certain  public  interventions 

in the absence  of the full implementation  of the polluter-pays  principle. Aid of this 

type clearly contributes to Community objectives. 

45. 

Examination  of  such  aid schemes  represents, with  respect to the  overall  number 

of cases treated, a very significant part of the decisions taken by the  Commission 

and therefore the workload of the services. However, the Survey  shows a marked 

rise in the volume  of aid granted  in the context of ad hoc cases whilst the volume 

of aid granted  under schemes  is steadily decreasing. This would  suggest that the 

Commission  should  concentrate  its  attention  upon  the  examination  of  the  most 

important  aid  cases  thereby  liberating  a substantial  part of its  resources  currently 

dedicated  to  the  examination  of  those  aid  schemes  that  support  Community 

objectives  and  meet  with  well  established  criteria.  This  reorientation  could  be 

achieved  by  simplifying  the  procedures,  in  particular  notification  by  Member 

States  and examination  by the  Commission. Such a simplification, desirable  also 

from the  point  of view  of  national  administrations, would  under  no  circumstances 

represent  a  weakening  of  the  respect  of  the  criteria  that  the  Commission  has 

established  and  which  have  led to  a  reduction  in the  volumes  of  this  type  of  aid 

by  limiting  them  to  the  level  of  support  that  is  necessary  as  a  function  of  the 

objectives  set  and  the  dimension  and  locality  of the  beneficiary.  This  is why  the 

Commission  has  the  intention  to  submit  in  the  near  future  under  the  terms  of 

41 

Article  94  EC  Treaty,  a  proposal  for  a  regulation  that  will  empower  it  to  adopt 

regulations  allowing  for  the  exemption  of  certain  aid  categories  from  notification 

obligations. 

46. 

It would  also  appear  necessary  to  limit  more  strictly  aid  granted  for  the  rescue 

and  restructuring  of  companies  in difficulty.  Even  if  part  of this  type  of  aid  could 

contribute to the acceleration of the adjustment  process of certain sectors in crisis 

and the attenuation  of the social consequences  of these adjustments, it is equally 

indispensable  that  they  be  rigorously  limited  to  the  levels  necessary  for  the 

restructuring  and,  ensure  the  long  term  viability  of  the  beneficiary  companies  in 

such a way that further aid would not be necessary.  Furthermore the tendency  of 

Member  States,  faced  with  budgetary  restrictions,  to  concentrate  the  available 

resources  for  their  regional  aid  schemes  on  a  few  large  investments  equally 

brings  the  Commission  to  envisage  the  individual  examination  of  these  cases 

which  are  likely  to  cause  the  most  important  distortions  of  competition.  The 

criteria  that will  be  applied  for the  examination  of these  cases  are to  be found  in 

the  so-called  "multi-sectorial"  framework  which  is  being  prepared.  Moreover  the 

same  phenomena  in the  context  of  horizontal frameworks  leads  the  Commission 

to  envisage  in  the  forthcoming  introduction  of  group  exemption  regulations, 

notification  ceilings  for  the  largest  aid  cases  as  has  already  been  done  in  the 

research and development  framework. 

42 

ANNEX  I 

TECHNICAL  ANNEX 

The  purpose  of  this  annex  is  to  outline  the  methodologies  and  sources  used  in 
order  to  produce  this  Survey  on  State  aid,  notably  with  regard  t o: 

I. 

Scope  of  the  study 
Fields  excluded 

II. 

Categories,  forms  and  objectives  of  aid 

III. 

Type  of  data,  sources  and  methods  of  assessing  the  aid  element 

IV. 

Specific  problems 

Research  and  Development  (R&D) 
Transport  in  Luxembourg 
Tourism;  Agri-foodstuff 
Training  and  unemployment 

43 

I,  Scope of the  Study 
Fields excluded 

1. 

This  Technical  Annex  explains 
the 
statistical  techniques  used.  It  is  an  update  of  the  technical  annex  used  for 
the  preceding  Survey. 

the  methodological  background  and 

The  Survey  focuses  on  State  aid  to  enterprises  falling  within  the  scope  of 
Articles  92  and  93  EC  Treaty  and  Article  95  ECSC  Treaty.  Accordingly, 
general  measures  (which,  if  they  distort  competition,  would  be  dealt  w i th 
under  Article  101  of  the  EC Treaty)  are  not  included  in  the  figures. 

2. 

The  following  measures  or'areas  are  not  dealt  w i t h: 

2 . 1.  Aid  whose  recipients  are  not  enterprises 

Aid  to  households 

Aid  to  the  handicapped 
Aid  for  infrastructure  (ports,  airports,  roads,  etc.) 
Aid  for  university  institutes 
Aid  for  public  vocational  training  centres 
Aid  to  developing  countries 

2.2.  General  measures  and  other  measures 

the  various 
in  Member  States 

tax  systems  and  general  social 
(depreciation,  social  security 

Differences  between 
security  systems 
deficit,  etc.) 
Quotas,  public  procurement,  market  restrictions,  technical  standards 
Specific 
employed,  etc.)16 
General  reduction 
Kingdom,  certain  products  in  the  French  overseas  Departments)17 

in  VAT  (for  example, 

(cooperatives,  owner 

in  the  United 

enterprises, 

foodstuffs 

schemes 

seif-

tax 

2.3.  Aid  granted  by  supranational  and  multinational  organizations 

Community  funds  (ERDF,  EAGGF,  etc.) 
Financing  by  EIB  and  EBRD 
Support  to  the  European  Space  Agency 

16 

17 

However,  a  lower-than-the-standard  rate  of  corporation  tax  for  small  businesses  constitutes 
an  aid  and  has  been  included  (e.g. Germany). 

Specific  reductions  such  as the  reduction  of  VAT  for  all  products  manufactured  in  Berlin  have 
been  included.  In  contrast,  all goods  (regardless  of  origin)  sold  in the  DOM  pay  a lower  rate  of 
VAT.  This  has  not  been  included  as an aid. 

44 

2.4. 

Individual  types  of  aid 

Defence  (see  point  11.2  of  this  annex) 
Aid  to  energy,  except  coal  (see  points  10.2  and  11)  and  aid  for 
energy  saving  and  alternative  (renewable)  energy 
Aid  to  transport,  except  railways  (see  pofnt  10.2);  and  the  aviation 
sector  covered  under  section  2.2.5.:  Other  Sectors. 
Training  and  unemployment  measures  (see  point  14) 
Press  and  media 
Buildings  and  public  works 
Public  utilities  such  as  gas,  water,  electricity, 
(tariff  structure  and  financing) 

telecommunications 

II.  Categories,  forms  and  objectives  of  aid 

Categories  of  aid 

in  accordance  with 

All  aid  represents  a  cost  or  a  loss  of  revenue  to  the  public  authorities  and  a 
benefit  to  recipients.  However,  the  "aid  element",  i.e.  the  ultimate  financial 
benefit  contained  in  the  nominal  amount  transferred,  depends  to  a  large 
extent  on  the  form  in  which  the  aid  is  provided.  Aid  should  therefore  be 
is  provided.  Four 
subdivided 
categories  have  been 
is 
for 
represented  by  a  letter:  A,  B,  C,  or  D,  followed  either  by  the  number  1  or  2, 
meaning  respectively  budgetary  aid  (i.e.  aid  provided  through  the  central 
government  budget)  or  tax  relief  (i.e.  aid  granted  via  the  tax  system),  plus 
an  A  if  the  aid  element  is  known;  for  example,  C1A  means  that  which  is 
being  referred  to  is  the  aid  element  (A)  of  a  soft  loan  (C1). 

this  purpose.  Each  category 

identified 

in  which 

form 

the 

it 

4. 

Group  A  (A1  + A 2) 

4 . 1.  The  first  category 

(A)  concerns  aid  which 

the 
recipient.  In  other  words,  the  aid  element  is  equal  to  the  capital  value  of  the 
aid.  This  first  category  has  been  subdivided  into  t wo  groups  depending  on 
whether  the  aid  was  granted  through  the  budget  (A1)  or  through  the  tax  or 
social  security  system  (A2). 

is  transferred 

in  full  to 

4 . 2. 

List  of  aid  coming  under  categories  A1  and  A2 

Grants 
Interest  subsidies  received  directly  by  the  recipient 
General  research  and  development  schemes  (see  point  11) 
is  not 
Tax  credits  and  other 
dependent  on  having  a  tax  liability  (i.e.  if  the  tax  credit  exceeds  the 
tax  due,  the  excess  amount  is  repaid) 

tax  measures,  where 

the  benefit 

45 

Tax  allowances,  exemptions,  and  rate  reliefs  where  the  benefit 
dependent  on  having  a tax  liability 
Reduction  in  social  security  contributions 

is 

5. 

Group  B1 

5 . 1. 

It  is  necessary 
to  determine  whether  a  financial  transfer  by  the  public 
authorities  in  the  form  of  equity  participation  is  an  aid  to  the  recipient  or  a 
matter  of  the  public  sector  engaging  in  a  commercial  activity  and  operating 
investor  under  normal  market  conditions.  Consequently, 
like  a  private 
although  equity  participation, 
forms,  could  have  been 
included  in  the  first  category,  they  have  been  grouped  together  under  a 
separate  category  (B1).  An  estimate  of  the  aid  element  contained  in  such 
equity  participation  is  set  out  in  category  B1 A. 

in  their  various 

5.2. 

List  of  aid  coming  under  category  B1 

Equity  participation  in  whatever  form  (including  debt  conversion) 

6. 

Group  C  (C1  + C 2) 

6 . 1.  The  third  category  (C)  covers  transfers  in  which  the  aid  element 

is  the 
interest  saved  by 
the  capital 
transferred  is  at  his  disposal.  The  financial  transfer  takes  the  form  of  a  soft 
loan  (C1)  or  tax  deferral  (C2).  The  aid  elements  (C1A/C2A)  in  this  category 
are  much  lower  than  the  capital  values  of  the  aid. 

the  recipient  during  the  period 

for  which 

6.2. 

List  of  aid  coming  under  categories  C1  or  C2 

(new 

loans 

loans  granted)  whether 

Soft 
sources.  (The  transfer  of  interest  subsidies  is  categorized  under  A1) 
Participatory  loans  from  public  or  private  sources 
Advances  repayable  in  the  event  of  success 
Deferred  tax  provisions  (reserves,  free  or  accelerated  depreciation, 
etc.) 

from  public  or  private 

7. 

Group  D1 

7 . 1.  The  last  category  (D1)  covers  guarantees,  expressed  in  nominal  amounts. 
The  aid  elements 
the  nominal 
(D1A)  are  normally  much 
amounts,  since  they  correspond  to  the  benefit  which  the  recipient  receives 
free  of  charge  or  at  lower  than  market  rate  if  a  premium  is  paid  to  cover  the 
risk.  However,  if  losses  are  incurred  under  the  guarantee  scheme,  the  tptal 
loss,  net  of  any  premiums  paid,  is  included  under  D1A,  since  it  can  be 
considered  as  a  definitive  transfer  to  the  recipient.  The  nominal  amounts  of 
these  guarantees  are  shown  under  D1 
the 
contingent  liability. 

indication  of 

to  give  an 

lower 

than 

46 

7.2. 

l i st  of  aid  coming  under  category  D1 

Amounts  covered  under  guarantee  schemes  (D1) 
Losses  arising  from  guarantee  schemes,  net  of  premiums  paid  (D1A) 

8. 

For  information  on  the  calculation  of  the  aid  element  contained 
different  forms  of  assistance,  see  point  10.6. 

in 

the 

9. 

Objectives  of  aid 

9 . 1.  The  aid  schemes  have  been  broken  down  into  19  headings  according  to 

their  sectorial  or  functional  objectives: 

1.1. 
1.2. 

2. 
2 . 1. 
2 . 1 . 1. 
2 . 1 . 2. 
2 . 1 . 3. 
2 . 1 . 4. 
2.1.5. 
2 . 1 . 6. 
2 . 1 . 7. 
2 . 1 . 8. 
2 . 1 . 9. 

2. 
2.2. 
2 . 2 . 1. 
2 . 2 . 2. 
2 . 2 . 3. 
2 . 2 . 4 . 1. 
2 . 2 . 4 . 2. 
2 . 2 . 5. 

3. 
3 . 1. 
3.2. 

Agriculture 
Fisheries 

Industry/Services 
(Horizontal  objectives) 
Research  and  Development 
Environment 
Small  and  Medium  Enterprises 
Trade/Export 
Energy  saving 
General  Investment 
Combat  unemployment 
Training  Aid 
Other  objectives 

)see  point  14  of 
)this  annex 

Industry/Services 
(Particular  sectors) 
Steel 
Shipbuilding 
Transport  (Railways) 
Coal  (Current  Production) 
Coal  (Other  Aid) 
Other  Sectors 

Regional  aid 
Regions  under  92(3)a 
Other  regions 

The  heading  3.:  "Regional  aid  "  contains  for  Germany  three  subheadings  : 
aid 
the  new  Bundeslander, 
regions  which  comprises 
Art.  92(3)c  regions  and  to  the  former  Zonenrandgebiet  and  West-Berlin. 

to  Art.  92(3)a 

In  the  coal  sector,  a  distinction  is  made  depending  on  whether  or  not  aid  is 
linked  to  current  production  (such  a  link  is  made  by  the  Commission  in  its 
annual  communication  to  the  Council  on  the  financial  aids  in  this  sector). 

47 

9.2. 

List  of  regions  within  the  meaning  of  Article  92(3)(a)18 

Member  StatP- 

Regions 

Greece 
Ireland 
Portugal 

Germany 

Spain 

France 

Italy 

)  the 
)  whole  of  the 
)  country 

Berlin  (Ôstl.  Stadbez.) 
Brandenburg 
Mecklenburg-Vorpommern 
Sachsen 
Sachsen-Anhalt 
Thuringen 

Galicia 
Asturias 
Cantabria 
Castilla-Leon 
Castilla-La  Mancha 
Extremadura 
Comunidad  Valenciana 
Andalucia 
Murcia 
Ceuta  y  Melilla 
Canarias 

Overseas  departments 

Campania 
Sud 
Sicilia 
Sardegna 

United  Kingdom 

Northern  Ireland 

18 

OJ  EC  no.  C  2 12  of  1 2 . 0 8 . 1 9 8 8,  pages  2  to  10  and  subsequent  changes. 

48 

Type  of  data,  sources  and  methods  nf 

assessing  the  aid  element 

10. 

As  a  general  rule,  the  figures  have  been  expressed 
in  terms  of  actual 
expenditure  (or  actual  revenue  losses  in  the  case  of  tax  expenditure).19 
Where 
the  amounts 
provided  for  in  planning  programmes  were  used  after  consultation  with  the 
Member  States  concerned.  Where 
figures  were  not  available  previous 
figures  have,  unless  otherwise  stated,  been  extrapolated. 

this  was  not  possible,  budget  appropriations  or 

The  value  of  certain  tax  concessions  cannot  be  calculated.  When  no  other 
the  aid 
information  was  provided  by 
element,  one  third  of  the  gross  intervention  has  been  taken  as  a  proxy  of 
the  aid  element.  These  proxies  were  only  made  in  a  f ew  cases  and  have  no 
significant  impact  on  the  results. 

the  Member  State 

to  calculate 

1 0 . 1.  All  the 

figures  have  been  compiled  in  national  currency  and  have  been 
converted  into  ECUs  at  the  annual  average  exchange  rate  provided  by  the 
Statistical  Office  of  the  European  Communities. 

As  regards  the  indicators  used  in  the  survey,  the  following  figures  were 
also  provided  by  EUROSTAT: 

-gross  domestic  product  (GDP)  at  market  prices:  (National  Accounts 
ESA  -  Aggregates  1970  -  1 994.) 
-exchange  rates 
-gross  value  added  at  market  prices:  (Datashop,  database  VISA) 

Intra-EC  exports  of  industrial  products  provided  by  Eurostat  comprise  the 
products  categorized  under  No:s  6  and  8  of  the  CTCI,  revision  3.  Statistics 
on  civilian  employment  (National  Accounts  ESA  -  Detailed  tables  by  branch 
1970  -  1 9 9 4,  item  B52)  are  used  to  calculate  the  various  ratios  by  person 
employed. 

10.2.  The  Commission's  departments  have  provided  figures  for  their  respective 
sectors  in  accordance  with  the  following  outlines.  Not  all  the  figures  have 
been  counter-checked  by  the  Member  States  nor  have  they  been  checked 
against  their  budgets  by  the  Commission's  departments. 

For  agriculture  and  fisheries  the  figures  are  those  submitted  by  the  Member 
States  in  accordance  with  the  procedure  emanating  from  the  resolution  of 
the  Representatives  of  the  Governments  of  the  Member  States  during  the 
3 0 6 th  Session  of  the  Council  on  20  October  1 9 7 4. 

19 

It  has  to  be  stressed  that  the  yearly  expenditures  (commitments)  are  not  necessarily  identical 
to  the  yearly  budgetary  appropriations  for  an  aid  scheme. 

49 

As  regards  agriculture  however,  complete  data  submitted  by  Ireland,  Italy 
and  Luxembourg  only  cover 
the  period  up  to  1 9 8 8,  1 9 87  and  1986 
respectively. 

Moreover  figures  were  only  available  up  to  1992  for  Greece  and  France  and 
up  to  1 9 93  for  the  Netherlands  and  Portugal.  Finally,  Spanish  data  available 
only  relate 
is 
reasonable  to  expect  that  given  the  missing  data  on  aid  granted  by  regional 
authorities,  a  considerable  underestimation  of  total  aid  granted  in  this  sector 
in  Spain  would  result. 

the  central  authorities  until  1 9 9 1. 

to  aid  granted  by 

It 

following  have  been  excluded: 

From  the  total  amount  of  budgetary  expenditure  indicated  in  the  inventory, 
the 
improvement 
(drainage),  social  security  measures  applicable  to  the  entire  sector,  income 
tax  concessions,  regional  selective  financial  assistance. 

research  aid, 

land 

figures  contain 

The 
parafiscal  charges, 
provided  by  the  State  (for  example,  training  courses). 

following:  grants, 

the 

interest  subsidies  and  a  number  of  benefits 

tax  reliefs,  aid 

financed  by 
in  kind 

In  the  fisheries  sector,  for  1993  and  1994  data  were  available  for  Belgium, 
Germany,  Greece,  Spain,  Ireland,  Italy  and  the  United  Kingdom. 

Loans  and  guarantees  are  not 
unquantifiable. 

included  where 

the  aid  element 

is 

the 

figures  are 

those  submitted  by 

the  Member  States 

For  coal 
in 
accordance  w i th  Commission  Decision  No.s  528/76/ECSC,  2064/86/ECSC 
the  Commission's  Annual 
and  3632/93/ECSC 
this  sector20.  New  capital 
Communication 
injections  w h i ch  may  constitute  aid  are  not  included  in  these  figures.  Public 
electricity 
contracts 
undertakings' 
generation)  w h i ch  might  comprise  an  aid  element  where  the  price  exceeds 
the  world  price  have  not  been  included. 

the  Council  on  aids 

coal-purchasing 

(for  example, 

summarized 

in 
in 

and 

for 

to 

For  transport  (Railways)  the  figures  are  those  submitted  by  the  Member 
States  in  accordance  w i th  Council  Regulation  No  1 1 0 7 / 7 0.  In  addition,  but 
shown  separately,  are  the  aids  given  for  railways  within  the  framework  of 
Council  Regulation  1 1 9 1 / 69  as  amended  by  Regulation  1 8 9 3 / 91  and 
the  maintenance  of  public 
Council  Regulation  1 1 9 2 / 69 
for  respectively 
service  obligations  and,  the  normalization  of  railways'  accounts  due 
to 
special  burdens  placed  on  railways. 

With  regard  to  other  forms  of  transport,  due  to  lack  of  information,  the  aid 
In 
figures  are  incomplete  and  fragmentary  and  have  not  been  included. 

20 

These  figures  are  broken  d o wn 
to 
current  production  (i.e.  special  social  security  measures  for  miners  and  aid  to  cover  inherited 
longer 
liabilities).  However  since  1994 
included  by  the  Commission  in  its  annual  communication  on  aid  in  this  sector. 

into  aid  for  current  production  and  those  not  relating 

figures  on  the  financing  of  social  benefits  are  no 

50 

particular  no  figures  have  been  given  for  aid  to  local  transport.  State  aid  in 
the  aviation  sector  is  covered  under  section  2.2.5.:  "Other  Sectors". 

10.3.  Industry 

submitted  within 

industry  and  the  service  sector,  the 

figures  have 
In  the  case  of  aid  to 
from 
generally  been 
taken 
information 
and 
standardized  annual  reporting  procedure  set  out  in  the  Commission  letter  of 
2 2 . 0 2 . 1 9 94  to  the  Member  States.  Furthermore,  data  are  checked  against 
national  publications  on  the  award  of  aid,  national  accounts,  draft  budgets 
and  other  available  sources. 

from  notifications  under  Article  93  and 
the  notification 

the  context  of 

10.4.  steel 

The  figures  presented  in  the  study  have  been  compiled  from  the  steel  aid 
monitoring  reports  from  the  Commission  to  the  Council.  The  figures  show 
the  amount  of  aid  granted  to  undertakings. 

10.5.  Tax  expenditure 

With  regard  to  tax  expenditure,  the  OECD  concept  was  used  as  a  starting 
point. 

"A  tax  expenditure  is  usually  defined  as  a  departure  from  the  generally 
accepted  or  benchmark 
tax 
treatment  of  particular  types  of  activities  or  groups  of  taxpayers". 

tax  structure,  which  produces  a  favourable 

Thus,  for  example,  tax  reliefs  granted  to  certain  development  areas  i.e.  to 
only  a  part  of 
tax 
expenditures,  whereas  the  rate  structure  is  regarded  as  an  integral  part  of 
the  benchmark  tax  system. 

tax  authority,  are  regarded  as 

territory  of 

the 

the 

However,  in  some  cases,  such  departures  from  the  benchmark  system  are 
on  the  borderline  between  aid  within  the  meaning  of  Article  92(1)  EC  and 
general  measures.  Further  work  has  to  be  carried  out  in  order  to  elucidate 
this  "grey  area". 

10.6.  Methods  of  assessing  the  aid  element 

1 0 . 6 . 1. 

10.6.2. 

In  order  to  analyze  the  different  forms  of  aid  on  a  fully  comparable 
basis,  it  is  necessary  to  reduce  them  to  a  common  denominator  -  the 
grant  element  which  they  contain.  To  this  end  the  methods  currently 
employed  by  the  Commission  in  its  control  of  State  aid  have  been 
used.  These  methods  are  all  official  Commission  policy  and  have 
been  discussed  at  a technical  level  with  the  Member  States. 

The  basic  approach  to  evaluating  the  aid  element 
is  the  common 
method  of  evaluation  used  in  calculating  the  net  grant  equivalent  of 
state 
the 
Communication  of  the  Commission  on  regional  aid  schemes,  OJ  C  31 
of  3 . 2 . 1 9 7 9;  see  also  Resolution  of  the  Council  of  2 0 . 1 0 . 1 9 7 1,  OJ 
C  111  of  4 . 1 1 . 1 9 7 1 ). 

interventions 

update 

annex 

latest 

see 

(for 

of 

51 

the  allowances 

Obviously,  the  receipt  of  an  aid  may  change  the  tax  liability  of  some 
and 
recipients.  However, 
taking  account  of 
reductions  that  can  be  claimed  against  profits  tax  and  the 
losses 
made  by  certain  companies,  the  effective  rate  of  tax  paid  in  general 
is  much  lower  than  the  theoretical  maximum  rate. 
by  companies 
Therefore  it  is  considered  that  the  results  obtained  without 
taking 
the  maximum 
account  of 
is 
theoretical  rate  had  been  employed.  The  common  denominator 
therefore  grant  equivalent  and  not  net  grant  equivalent. 

taxation  are  closer 

reality 

than 

to 

if 

10.6.3. 

1 0 . 6 . 4. 

10.6.5. 

Method  applied  to  different  forms  of  aid 

Group  A  -  grants/relief  from  social  charges,  etc. 
No  calculations  of  the  aid  element  are  necessary  because  this  group 
comprises  all  interventions  which  can  be  considered  as  constituting 
grants  or  grant  equivalents. 

line  w i th  established  Commission  policy,  such 

Group  B -  equity  (including  debt  conversion). 
interventions 
In 
constitute  aid  when  a  private  investor  operating  under  normal  market 
conditions  would  not  have  undertaken  such  an 
investment.  See 
Commission  communication  "  Application  of  Articles  92  and  93  of 
the  EEC  Treaty  and  of  Article  5  of  Commission  Directive  80/723/EEC 
to  public  undertakings  in  the  manufacturing  sector",  OJ  No  C  3 07  of 
1 3 . 1 1 . 1 9 9 3,  p321.  This  method  is  based  on  calculating  the  benefit  of 
the  intervention  to  the  recipient. 

As  regards  capital  injections  to  State  Holding  companies,  the  overall 
performance  of  each  company  was  examined  and  the  aid  element 
taken  as  the  amounts  required  to  cover  recurring  losses. 

Group  C  -  soft  loans  and  deferred  tax  provisions. 
In  accordance  w i th 
the  common  method  of  evaluation,  benefits 
accorded  to  an  enterprise  over  a  period  of  time  in  the  form  of  soft 
loans  and  deferred  tax  provisions  are  discounted  back  to  the  present. 
The  discount  rate  is  the  "reference  rate"  which  represents  the  rate  at 
which  companies  can  borrow  under  normal  market  conditions.  The 
definition  of 
in  each  Member  State  has  been 
formally  adopted  by  the  Commission  (see  point  14  of  the  common 
method  of  evaluation).  The  aid  element  in  a  soft  loan  in  any  one  year 
.  is,  therefore,  the  difference  between  the  reference  rate  and  the  rate 
at  which  the  State  accords  the  loan  multiplied  by  the  value  of  the 
loan. 

the  reference  rate 

21 

further  "The  Measurement  of 

See  also  "Application  of  Article  92  and  93  EEC  to  public  authorities'  holdings",  Bulletin  EC  9-
1 9 8 4, 
the  Aid  Element  of  State  Acquisitions  of  Company 
Capital"  -  I V / 4 5 / 87  Evolution  of  Concentration  and  Competition  Series,  Collection  :  Working 
Papers  8 7. 

52 

1 0 . 6 . 6. 

In  the  case  of  participatory  loans  the  net  cost  was  calculated  as  the 
difference  between  the  rate  of  return  effectively 
the 
state  on  these  participatory  loans  and  the  reference  rate.  In  the  case 
large  number  of 
of 
individual  cases,  the  actual  net  cost  to  the  State  was  taken  as  an 
estimate  of  the  aid  element. 

repayable  advances,  because  of 

received  by 

the  unduly 

is 

the  reference  rate  for 

is  the  difference  between 

therefore  based  on  calculating 

Group  D  -  amounts  covered  under  guarantee  schemes. 
For  loans  awarded  under  exchange  rate  guarantee  schemes,  the  aid 
element  is  calculated  as  though  the  loan  were  a  soft  loan  in  the 
currency  which  is  guaranteed  against  exchange  rate  fluctuations.  The 
aid  element 
the 
currency  which  is  covered  by  the  guarantee  and  the  rate  of  interest 
at  which  the  loan  is  given  less  any  charge  for  the  guarantee.  This 
the 
calculation 
scheme  to  the  recipient22.  For  simple  loan/guarantee  schemes  it  is 
normally 
look  at 
impractical,  because  of  the  volume  of  cases,  to 
every  guarantee  and  decide  what  would  be  the  price  the  recipients 
would  normally  have  to  pay  for  such  a  guarantee.  Consequently,  at 
the  global  level  the  net  cost  of  such  schemes  to  the  Government  (i.e. 
the  difference  between  the  cost  of  guarantees  honoured  by  the  state 
and  any  revenue  from  charges  for  the  securities)  was  taken,  except 
in  large  individual  cases  or  for  certain  sectors  where  the  value  of  the 
guarantee  can  be  calculated  on 
the 
recipient23. 

the  benefit  of 

the  basis  of 

the  value 

to 

10.7.  Although 

for 

figures 

loans  or  guarantees 

from  publicly  owned  credit 
institutions  are  given  when  they  are  considered  as  constituting  aid,  there 
are  greater  difficulties  in  identifying  and  quantifying  such  interventions  than 
for  other 
less 
transparent.  In  order  to  avoid  any  unwarranted  discrimination  w i th  respect 
treatment  of  aids  in  these  areas,  additional  work  as  to 
to  the  different 
identifying  and  quantifying  such  aid  will  have  to  be  done. 

forms  of  aid,  because  by 

their  very  nature 

they  are 

22 

23 

Where  this  information  is  not  available,  the  global  losses  to  the  Government  are  taken 
as  an  approximation  of  the  aid  element. 

This  has  been 
shipbuilding  sectors  and  in  individual  rescue  cases. 

the  Commission's  policy  as  regards  guarantees 

in 

the  steel  and 

53 

IV.  Specific  problems 

11.  Research and Development  (R&D) 

1 1 . 1.  R&D  schemes 

certain  elements  of 

The  figures  include  extra-mural  Government  funding  of  R&D  programmes 
for  nationalized  or  private  enterprises  classified  under  A1 A24.  In  view  of  the 
global  nature  of  the  sources  used,  it  has  not  always  been  possible 
to 
extra-mural 
public 
exclude 
expenditure  (e.g.  R&D  contracts).  Because  only  direct  funding  of  R&D  has 
been 
for  R&D  have  been 
that 
underestimated  (R&D  contracts  and  Public  Research  (see  11.2  and  11.3 
below)  have  been  omitted  because  of 
the  aid 
element  in  such  interventions). 

inability  to  quantify 

is  considered 

procurement 

included, 

figures 

from 

the 

the 

it 

11.2.  R&D  contracts 

figures,  since 

Figures  for  research  and  development  contracts  have  not  been  included  in 
is,  at  present,  often  unquantifiable. 
the 
Furthermore,  the  sources  do  not  permit  research  and  development  contracts 
intended  specifically  for  military  purpose  to  be  isolated  nor  the  impact  on 
the  market  of  such  contracts  to  be  evaluated25. 

the  aid  element 

11.3.  Public  Research 

No  figures  are  given  for  any  aid  element  contained  in  the  intramural  funding 
of  government  or  public  research  establishments  or  research  carried  out  by 
institutes  of  higher  education.  This  omission  may  be  important  for  certain 
sectors  where  state  or  semi-state  bodies  carry  out  large  scale  R&D  that 
may  have  commercial  repercussions26. 

11.4.  Nuclear  energy 

the  nuclear  energy  sector 

through 
the 
Member  States  provide  aid  to 
intermediary  of  their  public  undertakings  or  through  the 
intermediary  of 
R&D  financing  (mainly  in  the  form  of  R&D  contracts  and  public  research). 
Only  some  of  this  direct  financing  could  be  included  in  the  figures  for  R&D 
(2.1.1.).  The  figures  on  nuclear  energy  contained  in  R&D  figures  may  well 
be  underestimated.  Since  the  R&D 
figures  exclude  R&D  contracts  and 
public  research,  the  aid  element  of  such  measures  is  difficult  to  quantify. 

24 

25 

26 

Accelerated  depreciation  for  R&D  equipment  is  not  considered  as  an aid. 

See  point  9.2.  of  the  Community  framework  for  Research  and  Development  Aid, 
OJ  C  83  of  11.4.1986. 

See  point  9.1  of  the  Community  framework  for  Research  and  Development  Aid,. 

54 

12. 

Transport  in  Luxemhourg 

figures  appear 

to  other 
Transport 
Member  States  due  in  the  main  to  particularly  high  payments  for  pensions 
of  former  railways  employees.  No  further  details  are  available. 

in  Luxembourg 

to  be  higher 

relative 

13. 

Tourism  and  Agri-foodstuff  industries 

Due  to  a  lack  of  information  on  these  t wo  sectors  it  is  probable  that  the 
data  included  in  the  study  are  incomplete. 

*  . 

14. 

Training  and  unemployment 

It  is  not  always  apparent  whether  certain  fiscal  or  social  security  measures 
constitute  aid  or  form  a  coherent  and  integral  part  of  the  fiscal  or  social 
security  system.  In  addition,  incentive  schemes  exist  in  different  Member 
to  stimulate  or  facilitate  general  training  or  the  employment  of 
States 
certain  socially  disadvantaged  groups  of  workers.  In  so  far  as  such  schemes 
are  not  industry-specific  and  are  available  across  the  whole  economy,  and 
in 
fact  genuinely  constitute  part  of  a  general  system  of  employment 
measures,  they  are  not  to  be  considered  as  State  aids.  Although  a  number 
of  training  and  employment  schemes  have  been  treated  by  the  Commission 
as  State  aid,  not  all  Member  States'  measures  in  these  fields  have  up  to 
in 
now  been  examined 
delimiting  employment  aids,  particularly 
from 
training, 
general  measures  and 
that  are  comparable 
between  Member  States,  no  training  and  unemployment  measures  have 
been  analyzed  in  the  present  report. 

in  detail.  Because  of  the  considerable  problems 

those  concerning 

to  present 

in  order 

figures 

55 

ANNEX II 

STATISTICAL  ANNEX 

The  methodology  used  for  the  tables  contained  is  explained  in  the  Technical 
Annex. 

Table  A1 

State  aid  to  industry.  Annual  amounts  of  aid  element  1 9 9 0 - 1 9 94  in 
current  prices  and  national  currencies. 

Table  A2 

State  aid  to  industry.  Annual  amounts  of  aid  element  1 9 9 0 - 1 9 94  in 
current  prices  and  ECU. 

Table  A3 

State  aid  to  the  new  German  Lander. 
Annual  averages  1 9 9 2 - 1 9 94  in  ECU. 

Tables 
A 4 / 1 - 12 

Total  State  aid  -  annual  average  1 9 9 2 - 1 9 94  by  Member  State 

Figure  A1 

State  aid  to  industry  and  Community  Social  and  Regional  Funds. 
Annual  averages  1992-1994  per  employee  in  ECU. 

57 

Table  A1 

State  aid to  industry  in current  prices  1990-1994 

Belgium 

Denmark 

Germany 

Greece 

Spain 

France 

Ireland 

Italy* 

Luxembourg 

Netherlands 

Portugal 

Million  national  currency 

1990 
62.591,68 

Industry 

1991 
122.959,62 

1992 
74.360,25 

'  1993 
42.225,40 

2.444,82 

2.362,69 

2.604,90 

4.607,55 

1994 
40.180,71 

4.478,04 

20.289,56 

24.695,70 

29.845,34 

36.716,45 

34.165,75 

221.903,74 

213.410,97 

294.685,02 

289.697,34 

233.136,64 

285.919,74 

155.573,36 

251.519,09 

179.675,64 

235.323,46 

35.297,37 

31.262,53 

33.353,72 

40.468,79 

45.659,52 

282,81 

200,38 

224,31 

451,77 

430,11 

23.180,57 

18.346,51 

19.870,64 

21.919,77 

21.752,24 

2.029,05 

2.341,60 

2.533,70 

1.614,10 

1.631,50 

2.724,30 

1.814,39 

1.708,10 

1.622,42 

1.971,02 

133.997,53 

77.353,97 

77.644,63 

76.236,48 

171.132,51 

United  Kingdom 

2.000,37 

1.864,24 

1.459,07 

905,34 

961,56 

EUR  12 

40.458,98 

38.054,65 

40.839,78 

43.890,55 

43.549,91 

*  In  Billion  Lira 

58 

Table  A2 

State  aid to  industry  in  current  prices  1990-1994 

Belgium 

Denmark 

Germany 

Greece 

Spain 

France 

Ireland 

ttaly 

Luxembourg 

Netherlands 

Portugal 

Million ECU 

1990 
1.475,34 

Industry 
1991 
2.912,13 

1992 
1.787,73 

1993 

1994 

1.117,47 

1.013,18 

311,19 

298,75 

333,55 

606,77 

593,67 

9.887,17 

12.042,22 

14.772,14 

18.961.39 

17.748,44 

1.101,74 

947.58 

2.211,02 

1.210,98 

1.193.15 

1.898,07 

1.078,67 

1.204,87 

809.68 

1.481,23 

5.105,08 

4.433.15 

4.870,00 

6.1C0.50 

6.934,92 

368,35 

260,97 

294,86 

564.75 

541.71 

15.230.94 

11.965,84 

12.455,82 

11.904.96 

11.364,60 

47,83 

1.178,26 

739,88 

55,46 

785.12 

433,08 

60,91 

750,84 

444,45 

39.88 

745,87 

404,72 

41,14 

912,93 

869,29 

United  Kingdom 

2.802,20 

2.659,36 

1.978,25 

1.160,70 

1.239,13 

EUR 12 

40.458,98 

38.054,65 

40.839,78 

43.890,55 

43.549,91 

59 

Table  A3 

German State  aid to  the  new  Lander  - yearly  average  1992-1994 

Million  ECU 

in  per  cent 

in  per  cent  of  total 
aid 

Grants 

Tax  exemptions 

Equity  participations 

Soft  loans 

Tax  deferrals 

Guarantees 

5.583 

2.497 

6,4 

3.269 

0,00 

1.898 

42,1 

18,9 

0,1 

24,7 

0,00 

14,3 

32,1 

14,3 

0,04 

18,8 

0,00 

10,9 

TOTAL 

13.254 

100,00 

76,1 

During  the  years  of  1992  to  1994  aid  totalling  a yearly  average  of  ECU  13  2 54  bn 
was  granted  to  the  new  Lander.  This  volume  represents  7 6%  of  all  German  aid  to 
industry.  The  increase  of  the  overall  volume  of  German  aid  resulting  from  granting 
aid  to  the  new  Lander  has  been  partially  compensated  by  a  decrease  of  the  aid  to 
Berlin  and  to  the  Zonenrand. 

Most  of  the  aid  to  the  new  Lander  is  in  the  form  of  grants  (42,1 % ),  followed  by 
soft  loans  ( 2 4 , 7 % ),  tax  exemptions  (18,9%),  and  guarantees  ( 1 4 , 3 % ). 

60 

Figure A1 

Aid to  industry  and  Community  Funds per  employee 
Average  1 9 9 2 - 1 9 94 

4000 

3000 

O  2000 

1000 

B 

DK 

D 

GR 

E 

F 

IRL 

I 

L 

NL 

P 

UK 

EUR 
12 

•  Regional/Social funds per employee 

n  Aid to industry per employee 

Figure  A1  shows  the  importance  of  the"  Community's  Social  and  Regional  Fund 
when  compared  w i th  the  sum  of  all  national  aid  to  industry.  It  will  be  seen  that 
these  funds  contribute  a  significant  fraction  of  available  resources 
four 
Cohesion  countries: 

in  the 

The  contribution  of  the  above  funds  represents: 

6 0 , 7%  of  total  support  in  Portugal, 
4 8 , 7%  in  Spain, 
43,1 %  in  Ireland  and 
3 6 , 4%  in  Greece, 

while  the  Community  average  is  only  1 7 , 8 %. 

61 

Table A4/1 

Total state aid - annual average  1992 -1994 

Belgium 

in Million ECU 

SECTORS/FUNCTION 

A1A 

A2A 

B1A 

C1A 

C2A 

D1A 

TOTAL 

1.1. 
1.2. 

2.1. 
2.1.1. 
2.1.2. 
2.1.3. 
2.1.4. 
2.1.5. 
2.1.6. 
2.1.9. 

2.2. 
2.2.1. 
2.2.2 
2.2.3. 

Agriculture 
Fisheries 

Industry/Serv.:  Horizontal  Objectives 
Research and Development 
Environment 
SME 
Trade 
Energy sa ving 
General Investment 
Other Objectives 

Industry/Services:  Partie.  Sectors 
Steel 
Shipbuilding 
Transports 

of which Regulations  1191/69 and 1192/69 

2.2.4.1. 
2.2.4.2. 
2.2.5. 

Coal: Aid to current production 
Coal: Other aids 
Other sectors 

3. 
3.1. 
3.2. 

Regional  Aids 
Regions under 92(3)c 
Regions under 92(3)a 

259,52 
2,29 

268,74 
68,37 
6,83 
165,67 
6,72 
0,00 
21,15 
0,00 

1.974,88 
1,96 
28,77 
1.451,99 
647,38 
13,59 
473,52 
5,04 

177,45 
177,45 
0,00 

0,00 
0,00 

587,63 
0,16 
0,00 
23,07 
0,00 
180,33 
6,84 
377,23 

0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 

5,27 
5,27 
0,00 

0,00 
0,00 

14,85 
0,00 
0,00 
0,04 
0,00 
0,00 
0,00 
14,80 

0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 

0,00 
0,00 
0,00 

* 

0,00 
0,00 

112,89 
24,56 
0,00 
1,64 
86,69 
0,00 
0,00 
0,00 

2,87 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
2,87 

0,00 
0,00 
0,00 

' 

0,00 
0,00 

0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 

0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 

0,00 
0,00 
0,00 

0,00 
0,00 

259,52 
2,29 

86,81 
0,00 
0,00 
0,00 
81,39 
0,00 
5,42 
0,00 

0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 

1.070,91 
93,09 
6,83 
190,42 
174,80 
180,33 
33,42 
392,03 

1.977,74 
1,96 
28,77 
1.451,99 
647,38 
13,59 
473,52 
7,91 

13,85 
13,85 
0,00 

196,57 
196,57 
0,00 

TOTAL  ( 1 +2  + 3) 

2.682,88 

592,91 

14,85 

115,76 

0,00 

100,66 

3.507,04 

62 

Table A4/2 

Total jstate aid  - annual  average  1992 -1994 

Denmark 

in Million ECU 

SECTORS/FUNCTION 

A1A 

A2A 

B1A 

C1A 

C2A 

D1A 

TOTAL 

1.1. 
1.2. 

2.1. 
2.1.1. 
2.1.2. 
2.1.3. 
2.1.4. 
2.1.5. 
2.1.6. 
2.1.9. 

2.2. 
2.2.1 
2.2.2 
2.2.3. 

Agriculture 
Fisheries 

Industry/Serv.:  Horizontal  Objectives 
Research and Development 
Environment 
SME 
Trade 
Energy sa ving 
General Investment 
Other Objectives 

Industry/Services:  Partic.  Sectors 
Steel 
Shipbuilding 
Transports*** 

of which Regulations  1191/69 and 1192/69 

2.2.4.1. 
2.2.4.2. 
2.2.5. 

Coal: Aid to current production 
Coal: Other aids 
Other sectors 

3. 
3.1. 
3.2. 

Regional  Aids 
Regions under 92(3)c 
Regions under 92(3)a 

147,21 
13.69 

338,21 
136,65 
38,25 
7,65 
42,51 
113,16 
0,00 
0,00 

680,57 
0,00 
106,63 
550,62 
348,45 
0,00 
0,00 
23,32 

13,13 
13,13 
0,00 

0,00 
0,00 

9,46 
7,98 
1,48 
0,00 
0,00 
0,00 
0,00 
0,00 

0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 

0,00 
0,00 
0,00 

0,00 
0.00 

0.00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 

0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 

0.00 
0,00 
0,00 

0,00 
0,00 

15.35 
6,82 
0,00 
3,80 
2,34 
2,39 
0,00 
0,00 

0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 

0,57 
0,57 
0,00 

0,00 
0,00 

0.00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 

0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 

0,00 
0.00 
0,00 

0,00 
0,00 

4,40 
0,12 
0,00 
3,24 
1,04 
0,00 
0,00 
0,00 

0,26 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,26 

0,00 
0,00 
0,00 

147,21 
13,69 

367,42 
151.58 
39.73 
14.69 
45.88 
115.54 
0,00 
0,00 

680,83 
0.00 
106,63 
550,62 
348,45 
0,00 
0,00 
23,57 

13,70 
13,70 
0,00 

TOTAL  ( 1 +2  + 3) 

1.192,81 

9,46 

0,00 

15,92 

0,00 

4,66 

1.222,85 

*** 1990-1992 averages used in order to arrive at EUR  12 estimates in Table 12 

63 

Table A4/3 

Total state aid - annual average  1992 -1994 

Germany 

in Million ECU 

SECTORS/FUNCTION 

A1A 

A2A 

B1A 

C1A 

C2A 

D1A 

TOTAL 

1.1. 
1.2. 

2.1. 
2.7.7. 
2.1.2. 
2.1.3. 
2.1.4. 
2.1.5. 
2.1.6. 
2.1.9. 

2.2. 
2.2.7. 
2.2.2 
2.2.3. 

Agriculture 
Fisheries 

Industry/Serv.:  Horizontal  Objectives 
Research and Development 
Environment 
SME 
Trade 
Energy saving 
General Investment 
Other Objectives 

Industry/Services:  Partie.  Sectors 
Steel 
Shipbuilding 
Transports 

of which Regulations 1191/69 and 1192/69 

2.2.4.1. 
2.2.4.2. 
2.2.5. 

Coal: Aid to current production 
Coal:  Other aids 
Other sectors 

3. 
3.7. 
3.2. 
3.3. 

Regional  Aids 
Regions under 92(3)c 
Regions under 92(3)a 
Germany: (Berlin/Zonenrand) 

4.038,61 
18,87 

1.421,09 
744,71 
107,63 
269,63 
0,00 
279,28 
0,00 
19,85 

21.682,67 
108,58 
575,32 
12.114,17 
3.258,95 
5.532,99 
3.334,60 
17,01 

0,00 
0,00 

287,14 
0,00 
0,00 
229,65 
21,45 
36,04 
0,00 
0,00 

146,99 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
146,99 

4.970,11 
378,93 
4.573,12 
13,07 

3.831,83 
20,62 
2.456,03 
1.355,18 

0,00 
0,00 

8,16 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
8,16 

0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 

0,00 
0,00 
0,00 
0,00 

0,00 
0,00 

784,92 
.74,57 
42,08 
228,80 
0,00 
9,60 
0,00 
489,86 

13,83 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 -
73,83 

0,00 
0,00 

50,80 
0,00 
0,00 
50,80 
0,00 
0,00 
0,00 
0,00 

0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 

0,00 
0,00 

4.038,61 
18,87 

103,30 
0,00 
0,00 
32,03 
0,00 
0,00 
0,00 
71,27 

2.655,41 
759,29 
149,70 
810,91 
21,45 
324,93 
0,00 
589,14 

0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 

21.843,48 
108,58 
575,32 
12.114,17 
3.258,95 
5.532,99 
3.334,60 
177,83 

2.851,18 
52,56 
2.798,62 
0,00 

157,31 
0,00 
0,00 
157,31 

1.833,09 
0,00 
1.833,09 
0,00 

13.643,52 
452,77 
11.665,85 
1.525,55 

T O T AL  A ID  ( 1 +2  + 3) 

32.131,34 

4.265,95 

8,16 

3.649,93 

208,11 

1.936,39 

42.199,89 

64 

Table A4/4 

Total state aid - annual average  1992  -1994 

Greece 

SECTORS/FUNCTION 

A1A 

A2A 

B1A 

C1A 

C2A 

D1A 

TOTAL 

in Million ECU 

Agriculture 
Fisheries 

0,65 
1,20 

0,00 
0,00 

1.1. 
1.2. 

2.1. 
2.7.7. 
2.1.2. 
2.1.3. 
2.1.4. 
2.1.5. 
2.1.6. 
2.1.9. 

2.2. 
2.2.7. 
2.2.2 
2.2.3. 

Industry/Serv.:  Horizontal  Objectives 
Research and Development 
Environment 
SME 
Trade 
Energy saving 
General Investment 
Other Objectives 

Industry/Services:  Partie.  Sectors 
Steel 
Shipbuilding 
Transports 

of which Regulations  1191/69 and 1192/69 

2.2.4.1. 
2.2.4.2. 
2.2.5. 

Coal: Aid to current production 
Coal: Other aids 
Other sectors 

3. 
3.7. 
3.2. 

Regional  Aids 
Regions under 92(3)c 
Regions under 92(3)a 

240,89 
72,87 
0,77 
0,00 
0,00 
0,75 
0,00 
227,22 

417,44 
2,27 
134,68 
236,73 
6,79 
0,00 
0,00 
43,76 

132,85 
0,00 
132,85 

122,30 
0,00 
0,00 
7,95 
72,00 
0,00 
42,35 
0,00 

14,91 
0,79 
0,00 
0,00 
0,00 
0,00 
0,00 
14,12 

65,04 
0,00 
65,04 

0,00 
0,00 

0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 

0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 

0,00 
0,00 
0,00 

0,00 
0,00 

116,82 
0,27 
0,57 
115,59 
0,48 
0,03 
0,00 
0,00 

0,08 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,08 

18,70 
0,00 
18,70 

0,00 
0,00 

0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 

0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 

OfOO 
0,00 
0,00 

0,00 
0,00 

0,65 
1,20 

134,88 
0,00 
0,00 
0,00 
42,76 
0,00 
0,00 
92,13 

0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 

0,00 
0,00 
0,00 

614,89 
73,02 
0,62 
123,54 
115,24 
0,77 
42,35 
319,34 

432,43 
3,06 
134,68 
236,73 
6,79 
0,00 
0,00 
57,96 

216,58 
0,00 
216,58 

TOTAL  ( 1 +2  + 3) 

793,02 

202,25 

0,00 

135,60 

0,00 

134,88 

1.265,75 

65 

Table A4/5 

Total state aid - annual  average  1992 -1994 

Spain 

in Million ECU 

SECTORS/FUNCTION 

A1A 

A2A 

B1A 

C1A 

C2A 

D1A 

TOTAL 

1.1. 
1.2. 

2.1. 
2.7.7. 
2.1.2. 
2.1.3. 
2.1.4. 
2.1.5. 
2.1.6. 
2.1.9. 

2.2. 
2.2.7. 
2.2.2 
2.2.3. 

Agriculture 
Fisheries 

Industry/Serv.:  Horizontal  Objectives 
Research and Development 
Environment 
SME 
Trade 
Energy sa ving 
General Investment 
Other Objectives 

Industry/Services:  Partie.  Sectors 
Steel 
Shipbuilding 
Transports 

of which Regulations  1191/69 and 1192/69 

2.2.4.1. 
2.2.4.2. 
2.2.5. 

Coal: Aid to current production 
Coal: Other aids 
Other sectors 

3. 
3.7. 
3.2. 

Regional  Aids 
Regions under 92(3)c 
Regions under 92(3)a 

TOTAL  ( 1 +2  + 3) 

N/A 

94,85 

396,40 
68,92 
44,70 
128,15 
0,62 
24,54 
48,42 
81,04 

3.898,50 
118,34 
180,43 
2.056.64 
106,95 
521,67 
660,80 
360,62 

251,12 
195,44 
55,68 

4.640,87 

N/A 

0,00 

0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 

0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 

0,00 
0,00 
0,00 

0,00 

N/A 

0,00 

5,99 
0,00 
0,00 
3,99 
0,00 
0,28 
1,71 
0,00 

0,02 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,02 

0,00 
0,00 
0,00 

N/A 

0,00 

182,11 
100,54 
0,00 
52,18 
17,21 
0,00 
9,37 
2,81 

0,55 
0,00 
0,00 
0,00 
0 00 
0,00 
0,00 
0,55 

0,00 
0,00 
0,00 

N/A 

0,00 

N/A 

0,00 

94,85 

0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 

o.co 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
•  0,00 

0,00 
0,00 
0,00 

32,50 
0,00 
0,00 
5,28 
0,00 
0,18 
27,04 
0,00 

0,00 
0,00 
0,00 
0,00 
0.00 
0,00 
0,00 
0,00 

0,00 
0,00 
0,00 

616,99 
769,47 
44,70 
189,60 
17,83 
25,00 
86,54 
83,84 

3.899,07 
118,34 
180,43 
2.056,64 
106,95 
521,67 
660,80 
361,19 

251,12 
795,44 
55,68 

6,01 

182,65 

0,00 

32,50 

4.862,03 

66 

Table A4/6 

Total state aid - annual  average  1992 -1994 

France 

in Million ECU 

SECTORS/FUNCTION 

A1A 

A2A 

B1A 

C1A 

C2A 

D1A 

TOTAL 

1.1. 
1.2. 

2.1. 
2.7.7. 
2.1.2. 
2.1.3. 
2.1.4. 
2.1.5. 
2.1.6. 
2.1.9. 

2.2. 
2.2.7. 
2.2.2 
2.2.3. 

Agriculture 
Fisheries 

Industry/Serv.:  Horizontal  Objectives 
Research and Development 
Environment 
SME 
Trade 
Energy sa ving 
General Investment 
Other Objectives 

Industry/Services:  Partie.  Sectors 
Steel 
Shipbuilding 
Transports*** 

of which Regulations  1191/69 and 1192/69 

2.2.4.1. 
2.2.4.2. 
2.2.5. 

Coal: Aid to current production 
Coal: Other aids 
Other sectors 

3. 
3.7. 
3.2. 

Regional  Aids 
Regions under 92(3)c 
Regions under 92(3)a 

613,93 
41,07 

809,97 
584,63 
40,57 
107,33 
14,17 
28,31 
27,14 
7,81 

9.390,23 
0,00 
64,69 
5.631,43 
3.336,21 
225,24 
2.053,70 
1.415,17 

0,00 
0,00 

523,14 
450,18 
0,00 
34,98 
0,00 
0,00 
37,98 
0,00 

16,27 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
16,27 

482,14 
787,67 
294,53 

577,73 
325,95 
251,78 

0,00 
0,00 

0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 

733,13 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
733,13 

0,00 
0,00 
0,00 

0,00 
0,00 

307,59 
65,27 
0,00 
37,04 
191,87 
.  0,00 
13,41 
0,00 

12,71 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
12,71 

0,99 
0,99 
0,00 

0,00 
0,00 

104,63 
0,44 
0,00 
26,56 
77,63 
0,00 
0,00 
0,00 

28,35 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
28,35 

0,00 
0,00 
0,00 

0,00 
0,00 

613,93 
41,07 

891,61 
0,00 
0,00 
0,00 
859,53 
0,00 
32.08 
0,00 

2.636,93 
1.100,53 
40,57 
205,90 
1.143,20 
28,31 
110,60 
7,81 

0,00 
0,00 
0,00 
000 
0,00 
0,00 
0,00 
0,00 

0,37 
0,00 
0,37 

10.180,69 
0,00 
64,69 
5.631,43 
3.336,21 
225,24 
2.053,70 
2.205,63 

1.061,22 
514,55 
546,67 

TOTAL  ( 1 +2  + 3) 

11.337,33 

1.117,13 

733,13 

321,29 

132,93 

891,98 

14.533,85 

***  1990-1992  averages  used  in order  to  arrive  at  EUR  ' 

2  estimates 

in Table  12 

67 

Table A4/7 

Total state aid - annual  average  1992 -1994 

Ireland 

SECTORS/FUNCTION 

A1A 

A2A 

B1A 

C1A 

C2A* 

D1A 

TOTAL 

Agriculture 
Fisheries 

N/A 

11,15 

N/A 

0,00 

N/A 

0,00 

N/A 

0,00 

N/A 

N/A 

0,00 

0,00 

11,15 

in Million ECU 

1.1. 
1.2. 

2.1. 
2.7.7. 
2.1.2. 
2.1.3. 
2.1.4. 
2.1.5. 
2.1.6. 
2.1.9. 

2.2. 
2.2.7. 
2.2.2 
2.2.3. 

Industry/Serv.:  Horizontal  Objectives 
Research and Development 
Environment 
SME 
Trade 
Energy sa ving 
General Investment 
Other Objectives 

Industry/Services:  Partie.  Sectors 
Steel 
Shipbuilding 
Transports 

of which Regulations  1191/69 and 1192/69 

2.2.4.1. 
2.2.4.2. 
2.2.5. 

Coal: Aid to current production 
Coal: Other aids 
Other sectors 

3. 
3.7. 
3.2. 

Regional  Aids 
Regions under 92(3)c 
Regions under 92(3)a 

56,69 
77,23 
0,00. 
22,12 
15,74 
7,60 
0,00 
0,00 

189,24 
0,00 
0,00 
136,99 
72,42 
0,00 
0,00 
52,24 

259,70 
0,00 
259,70 

0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 

0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 

0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 

0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 

0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 

0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 

29,83 
0,00 
29,83 

37,68 
0,00 
37,68 

15,34 
0,00 
15,34 

0,00 
0,00 
0,00 
0,00 
•  0,00 
0,00 
0,00 
0,00 

0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 

0,00 
0,00 
0,00 

15,27 
0,00 
0,00 
1,29 
13,97. 
0,00 
0,00 
0,00 

0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 

0,37 
0,00 
0,37 

71,95 
77,23 
0,00 
23,41 
29,71 
7,60 
0,00 
0,00 

189,24 
0,00 
0,00 
136,99 
72,42 
0,00 
0,00 
52,24 

342,91 
0,00 
342,91 

TOTAL  ( 1 +2  + 3) 

516,76 

29,83 

37,68 

15,34 

0,00 

15,63 

615,24 

68 

Table A4/8 

Total state aid - annual  average  1992  -1994 

Italy 

in Million ECU 

SECTORS/FUNCTION 

A1A 

A2A 

B1A 

C1A 

C2A 

D1A 

TOTAL 

1.1. 
1.2. 

Agriculture 
Fisheries 

N/A 
119,92 

N/A 

N/A 

0,00 

0,00 

2.1. 
2.7.7. 
2.1.2. 
2.1.3. 
2.1.4.  . 
2.1.5. 
2.1.6. 
2.1.9. 

2.2. 
2.2.7. 
2.2.2 
2.2.3. 

Industry/Serv.:  Horizontal  Objectives 
Research and Development 
Environment 
SME 
Trade 
Energy sa ving 
Genera! Investment 
Other Objectives 

Industry/Services:  Partie.  Sectors 
Steel 
Shipbuilding 
Transports*** 

. 

of which Regulations  1191/69 and 1192/69 

2.2.4.1. 
2.2.4.2., 
2.2.5. 

Coal: Aid to current production 
Coal: Other aids 
Other sectors 

2.324,79 
191,75 
9,77 
850,54 
465,85 
155,12 
271,98 
379,77 

9.446,69 
645,16 
211,16 
7.811,90 
2.425,80 
0,00 
0,00 
778,47 

0,00 
0,00 
0,00 
0,00 
•  0,00 
0,00 
0,00 
0,Q0 

4,04 
0,00 
0,00 
0,00 
0;00 
0,00 
0,00 
.4,04 

761,57 
0,00 
0,00 
0,00 
759,05 
0,00 
0,00 
2,52 

934,79 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
934,79 

N/A 

0,00 

182,99 
103,11 
0,00 
48,70 
3,43 
0,00 
2,40 
25,35 

73,41 
0,00 
Q.00 
0,00 
0,00 
0,00 
b,oo 
73,41 

3. 
3.7. 
3.2. 

Regional  Aids 
Regions under 92(3)c 
Regions under 92(3) a 

1.058,19 
88,87 
969,38 

3.531,33 
89,37 
4.441,96 

3,13 
3,73 
0,00 

3,86,62 
63,95 
322,67 

N/A 

N/A 

0,00 

0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 

0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 

0,00 
0,00 
0,00 

0,00 

119,92 

3,59 
0,00 
0,00 
3,59 
0,00 
0,00 
0,00 
0,00 

0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 

9,21 
7,04 
8,77 

3.272,94 
294,86 
9,77 
902,83 
1.228,32 
155,12 
274,39 
407,64 

10.458,92 
645,16 
211,16 
7.811,90 
2.425,80 
0,00 
0.00 
1.790,71 

5.988,49 
246,31 
5.742,18 

TOTAL  ( 1 +2  + 3) 

12.949,58 

H.535,37 

1.699,49 

643,02 

0,00 

12,80 

19.840,27 

1990 -1992 averages used in order to arrive at EUR estimates in Table 12 

69 

Table A4/9 

Total state aid  - annual  average  1992 -1994 

Luxembourg 

SECTORS/FUNCTION 

A1A 

A2A 

B1A 

C1A 

Agriculture 
Fisheries 

N/A 
N/A 

N/A 
N/A 

N/A 
N/A 

N/A 
N/A 

in Million ECU 

D1A 

TOTAL 

N/A 
N/A 

C2A 

•N/A 
N/A 

1.1; 
1.2. 

2.1. 
2.7.7. 
2.1.2. 
2.1.3. 
2.1.4. 
2.1.5. 
2.1.6. 
2.1.9. 

2.2. 
2.2.7. 
2.2.2 
2.2.3. 

Industry/Serv.:  Horizontal  Objectives 
Research and Development 
Environment 
SME 
Trade 
Energy saving 
General Investment 
Other Objectives 

Industry/Services:  Partie.  Sectors 
Steel 
Shipbuilding 
Transports 

of which Regulations  1191/69 and 1192/69 

2.2.4.1. 
2.2.4.2. 
2.2.5. 

Coal: Aid to current production 
Coal: Other aids 
Other sectors 

3. 
3.7. 
3.2. 

Regional  Aids 
Regions under 92(3)c 
Regions under 92(3)a 

10,62 
2,68 
1,85 
5,78 
0,32 
0,00 
0,00 
0,00 

180,44 
0,00 
0.00 
180,34 
176,12 
0,00 
0,00 
0.70 

33,06 
33,06 
0,00 

0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 

0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 

0,00 
0,00 
0,00 

0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 

0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 

0,00 
0,00 
0,00 

3,52 
7,07 
0,00 
2,47 
0,04 
0,00 
0,00 
0,00 

0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 

0,00 
0,00 
0,00 

3,52 

• 

0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 

0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 

0,00 
0,00 
0,00 

0,00 

0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 

0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0 00 

0,00 
0,00 
0,00 

14,15 
3,69 
1,85 
8,25 
0,36 
0,00 
0,00 
0,00 

180,44 
0,00 
0,00 
180.34 
176.12 
0,00 
0,00 
0,10 

33,06 
33,06 
0,00 

0,00 

227,65 

TOTAL  ( 1 +2  + 3) 

224,12 

0,00 

0,00 

70 

Table A4/10 

Total  state aid - anrruat average  1992 -1994 

Netherlands 

1.1. 
1.2. 

2.1. 
2.7.7. 
2.1.2. 
2.1.3. 
2.1.4. 
2.1.5. 
2.1.6. 
2.1.9. 

2.2. 
2.2.7. 
2.2.2 
2.2.3. 

2.2.4.1. 
2.2.4.2. 
2.2.5. 

3. 
3.7. 
3.2. 

in Million ECU 

SECTORS/FUNCTION 

A1A 

A2A 

B1A 

C1A 

C2A 

D1A 

TOTAL 

Agriculture 
Fisheries 

Industry/Serv.:  Horizontal  Objectives 
Research and Development 
Environment 
SME 
Trade 
Energy sa ving 
General Investment 
Other Objectives 

Industry/Services:  Partie.  Sectors 
Steel 
Shipbuilding 
Transports 

of which Regulations  1191/69 and 1192/69 

Coal: Aid to current production 
Coal: Other aids 
Other sectors 

Regional  Aids 
Regions under 92(3)c 
Regions under 92(3)a 

293,39 
2,38 

423,26 
767,72 
45,33 
13,68 
0,00 
173,63 
13,12 
15,77 

1.092,03 
0,00 
9,16 
1.006,42 
475,46 
0,00 
0,00 
76,44 

119,90 
119,90 
0,00 

0,00 
0,00 

100,62 
57,26 
0,00 
7,33 
0,00 
42,03 
0,00 
0,00 

0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 

0,00 
0,00 
0,00 

0,00 
0,00 

0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 

0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 

0,00 
0,00 
0,00 

0,00 
0,00 

13,66 
-7,20 
0,00 
0,00 
14,86 
0,00 
0,00 
0,00 

0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 

0,00 
0,00 
0,00 

0,00 
0,00 

0,27 
0,00 
0,27 
0,00 
0,00 
0,00 
0,00 
0,00 

0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 

0,00 
'0,00 
0,00 

0,00 
0,00 

293,39 
2,38 

59,90 
0,00 
0,00 
28,47 
0,00 
0,00 
22,80 
8,63 

0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 

0,00 
0,00 
0,00 

597,71 
277,78 
45,61 
49,48 
14,86 
215,66 
35,92 
24,40 

1.092,03 
0,00 
9,16 
1.006,42 
475,46 
0,00 
0,00 
76,44 

119,90 
119,90 
0,00 

TOTAL  ( 1 +2  + 3) 

1.930,96 

100,62 

0,00 

13,66 

0,27 

59,90 

2.105,41 

71 

Table A4/11 

Total state aid - annual average  1992 -1994 

Portugal 

in Million ECU 

1.1. 
1.2. 

2.1. 
2.1.1. 
2.1.2. 
2.1.3. 
2.1.4. 
2.1.5. 
2.1.6. 
2.1.9. 

2.2. 
2.2.7. 
2.2.2 
2.2.3. 

2.2.4.1. 
2.2.4.2. 
2.2.5. 

3. 
3.7. 
3.2. 

SECTORS/FUNCTION 

A1A 

A2A 

B1A 

C1A 

C2A 

D1A 

TOTAL 

Agriculture 
Fisheries 

Industry/Serv.:  Horizontal  Objectives 
Research and Development 
Environment 
SME 
Trade 
Energy saving 
General Investment 
Other Objectives 

Industry/Services:  Partie.  Sectors 
Steel 
Shipbuilding 
Transports 

of which Regulations  1191/69 and 1192/69 

Coal: Aid to current production 
Coal: Other aids 
Other sectors 

Regional  Aids 
Regions under 92(3)c 
Regions under 92(3)a 

151,22 
4,03 

97,00 
75,60 
0,00 
2,50 
0,54 
7,42 
0,38 
70,57 

353,43 
93,00 
4,54 
98,15 . 
71,41 
4,67 
1,50 
151,56 

68,53 
0,00 
68,53 

0,00 
0,00 

37,25 
0,00 
0,00 
0,00 
0,00 
0,00 
37,25 
0,00 

1,85 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
1,85 

82,41 
0,00 
82,41 

TOTAL  ( 1 +2  + 3) 

674,22 

121,50 

0,00 
0,00 

1,13 
7,73 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 

0,49 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,49 

0,00 
0,00 
0,00 

1,62 

0,00 
0,00 

0,36. 
0,00 
0,00 
0,05 
0,19 
0,00 
0,12 
0,00 

5,27 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
5,27 

0,27 
0,00 
0,27 

5,91 

0,00 
0,00 

0,00 
.0,00 
0,00 
0.00 
0,00 
0,00 
0,00 
0,00 

0,00 
0.00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 

0,00 
0.00 
0,00 

0,00 
0,00 

29,16 
0,00 
0.00 
0.00 
0,00 
0,00 
29,16 
0,00 

0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 

0,00 
0,00 
0,00 

151,22 
4,03 

164,90 
16.73 
0.00 
2.55 
0,73 
7,42 
66.91 
70,57 

361,04 
93.00 
4.54 
98.15 
71,41 
4.67 
1,50 
159,17 

151,21 
0,00 
151,21 

0,00 

29,16 

832,40 

72 

TableA4/12 

Total state aid  - annual  average  1992 -1994 

United  Kingdom 

in Million ECU 

1.1. 
1.2. 

2.1. 
2.7.7. 
2.1.2. 
2.1.3. 
2.1.4. 
2.1.5. 
2.1.6. 
2.1.9. 

2.2. 
2.2.7. 
2.2.2 
2.2.3. 

2.2.4.1. 
2.2.4.2. 
2.2.5. 

3. 
3.7. 
3.2. 

SECTORS/FUNCTION 

A1A 

A2A 

B1A 

C1A 

C2A 

D1A 

TOTAL 

Agriculture 
Fisheries 

Industry/Serv.:  Horizontal  Objectives 
Research and Development 
Environment 
SME 
Trade 
Energy sa ving 
General Investment 
Other Objectives 

Industry/Services:  Partie.  Sectors 
Steel 
Shipbuilding 
Transports 

of which Regulations  1191/69 and 1192/69 

Coal: Aid to current production 
Coal: Other aids 
Other sectors 

520,49 
22,30 

444,58 
236,50 
7,22 
80,23 
103,40 
0,12 
10,25 
6,86 

1.904,55 
0,00 
6,42 
1.349,73 
1.344,83 
7,33 
298,39 
242,68 

0,00 
0,00 

26,05 
0,00 
0,00 
0,00 
0,00 
0,00 
26,05 
0,00 

0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 

Regional  Aids 
Regions under 92(3)c 
Regions under 92(3)a 

576,99 
775,64 
401,35 

62,95 
62,95 
0,00 

0,00 
0,00 

0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 

0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 

4,54 
4,54 
0,00 

0,00 
0,00 

0,01 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,01 

0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 

30,62 
0,42 
30,19 

0,00 
0,00 

13,19 
0,00 
0,00 
0,00 
0,00 
0,00 
13,19 
0,00 

0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 

0,00 
'0,00 
0,00 

0,00 
0,00 

22,07 
0,00 
0,00 
21,11 
0,96 
0,00 
0,00 
0,00 

0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 
0,00 

520,49 
22,30 

505,89 
236,50 
7,22 
101,34 
104,36 
0,12 
49,49 
6,87 

1.904,55 
0,00 
6,42 
1.349,73 
1.344,83 
7,33 
298,39 
242,68 

29,27 
0,00 
29,27 

704,37 
243,56 
460,82 

TOTAL  ( 1 +2  + 3) 

3.468,92 

89,00 

4,54 

30,62 

13,19 

51,34 

3.657,61 

73 

ANNEX  III 

COMMUNITY  FUNDS AND  INSTRUMENTS 

75 

Community  Funds.  Instruments  and  Programmes 

that 

is  given. 

It  should  be  noted 

Below  a  brief  description  of  the  main  Community  funds,  instruments  and 
programmes 
the  Cohesion  Financial 
Instrument  and  Cohesion  Fund  were  established  in  April  1993  and  May 
1 9 94  respectively.  Moreover  in  July  1993,  halfway  through  the  reporting 
period,  the  second  reform  of  the  Structural  Funds  (EAGGF-Guidance,  ERDF, 
Social  Fund,  FIFG)  took  place  thereby  confirming  the  basic  principles  which 
inspired  the  first  reform  in  1988  and  bringing  in  a  number  of  operational 
the 
improvements.  A 
conclusions  of 
the 
Structural  Funds  allocated  to  four  Member  States  eligible  for  assistance 
from  the  Cohesion  Fund  (Greece,  Spain,  Ireland  and  Portugal)  would  double 
in  real  terms  between  ' 1 9 92  and  1999  and  that 
the 
Structural  Funds  over  the  period  1994-99  would  amount  to  ECU  141  471 
million  (at  1 9 92  prices).  A  new  instrument  was  also  introduced  w i th  the 
entry 
the 
restructuring  of  the  fisheries  sector. 

in  accordance  w i th 
resources  of 

the  Edinburgh  European  Council, 

the  FIFG  to  provide  support 

innovation  was 

into  operation 

in  1994  of 

funding 

further 

that, 

total 

the 

for 

for 

Close  on  the  heels  of  the  Structural  Funds  reform,  the  4 th  FPRD  (4th 
Framework  Programme  for  Research  and  Technological  Development)  was 
also  adopted  for  the  period  1994-1998.  This  new  Framework  Programme 
now  includes  all  the  Community  research  and  development  activities.  Its 
budget  is  ECU  13,1  billion.  Its  overall  structure  has  been  streamlined  to 
respond  to  three  major  challenges: 

developing  scientific  and  technological  excellence  in  Europe,  to  meet 
the  needs  of  industry  and  improve  the  quality  of  life  in  the  Member 
States. 
furthering 
exploitation 
framing  and  implementing  other  Community  policies. 

coordination 
research 

cooperation 
the 

and 
efforts. 

improving 

Member 

States' 

and 

the 

of 

to 

internal 

intervention.  As  such, 

EAGGF-Guarantees 
The  Common  Agricultural  Policy  is  a  general  system  of  market  support 
based  on  external  protection  and 
is 
import  quotas  and  customs  tariffs,  systems  which  bring 
comparable 
the  recourse 
about  a  transfer  of  resources  between  sectors,  without 
to 
direct  aid.  Much  of  EAGGF  Guarantee  expenditure 
is  concerned  w i th  a 
therefore  cannot  be  regarded  as 
this 
system  of  support  of 
comparable  to  expenditure  on  aid.  Moreover,  the  breakdown  by  Member 
State  has  little  meaning  in  this  case  because  the  ultimate  beneficiary  may 
not  be  in  the  Member  State  where  the  expenditure  took  place.  Around  3 5% 
to 
of  expenditure 
producers  or  processors. 

form  of  price  compensation  aid  granted 

type  and 

the 

in 

is 

it 

EAGGF-Guidance 
The  activities  of 
into  direct 
measures  and  indirect  measures.  Direct  measures  may  be  considered  as  aid 
investment  projects  or 
to  public  and  private 

the  EAGGF  Guidance  Section  are  divided 

respect  of 

investors 

in 

76 

the  Guidance  budget. 

programmes.  In  recent  years  direct  measures  have  accounted  for  around 
Indirect  measures  on  the  other  hand  are 
half  of 
carried  out  on  the  Community's  initiative  and  w i th  its  financial  help  but  they 
are  executed  by  Member  States.  As  a  result  the  expenditure  will  have  been 
covered  in  most  cases  under  the  heading  of  national  aid.  In  general  they 
farmers'  early 
can  be  considered  as  socio-structural  measures 
retirement  scheme), 
less-favoured 
regions,  or  investment  aid  at  the  farm  level. 

remedial  measures 

favour  of 

(e.g. 

the 

in 

FIFG 
Structural  assistance  for  the  fishing  industry  was  first  granted  as  far  back 
as  1 9 7 1,  the  year  in  which  it  was  agreed  to  use  funds  from  the  Guidance 
Section  of 
the  European  Agricultural  Guidance  and  Guarantee  Fund 
(EAGGF)  to  encourage  the  construction  and  modernisation  of  inshore  and 
pelagic  fishing  vessels  together  with  the  processing  and  marketing  of  fish. 
In  1978 
interim 
the  original  rules  were  replaced  by  a  series  of  annual 
measures  widened  in  scope  to  encompass  the  restructuring  of  the  inshore 
fleet  and  the  development  of  aquaculture. 

In  1983  a  system  of  multiannual  programmes  was  put  into  effect,  based 
around  schemes  under  which  aid  could  be  granted  for  restructuring 
the 
industry  and  conversion  of  fishing  activities.  In  1986  the  need  to  reinforce 
this  approach  resulted  in  the  whole  range  of  structural  measures  for  the 
fleet  and  aquaculture  being  grouped 
regulatory 
framework  . 

in  a  single 

together 

to  assist 

time,  one  and 

the  processing  and  marketing  of 

fishery 
Schemes  designed 
products  developed  from  a  different  source,  which  was  shared  w i th 
the 
structural  policy  for  processing  and  marketing  of  agricultural  products.  For  a 
the  processing  and 
long 
the  same  Regulation  covered 
marketing  of  both  types  of  products.  However, 
that 
fisheries 
better  account  was  taken  of 
the 
sector, 
for  the  processing  and 
marketing  of  fishery  products  has  since  had  its  own  rules,  integrated  from 
that  date  into  the  Community's  Structural  Funds  arrangements. 

the  specific  requirements  of 

in  1989;  assistance 

in  order  to  ensure 

t wo  were  split 

the 

three  major  changes  were 

In  1993  the  structural  elements  of  the  Common  Fisheries  Policy  (CFP)  were 
introduced.  These  ensured 
overhauled  and 
the 
greater  coherence  between  different  aspects  of  the  policy,  removed 
partition  which  had  divided  the  CFP  from  other  Community  activities  and, 
took  account  of  the  changes  affecting  the  sector.  The  CFP's  structural 
measures  were  integrated  into  the  Community's  system  of  structural  funds 
when  these  were  reformed  in  1993.  Moreover  the  different  fishery  finances 
available 
the 
Financial  Instrument  for  Fisheries  Guidance  (FIFG). 

for  such  activity  were  regrouped 

fund  k n o wn  as 

in  one 

Social  Fund 
The  objectives  of  the  Social  Fund  are  to  improve  employment  opportunities 
for  young  people  (under  the  age  of  25)  and  for  other  groups  deemed  to  be 
the  handicapped,  migrant 
in  need  of  support 

(long-term  unemployed, 

77 

workers  and'  other  socially  disadvantaged  groups).  The  Fund 
contributes 
private  operators  in  the  following  areas: 

financing  of  operations  carried  out  by 

the 

to 

therefore 
the  public  or 

the  prevention  of  long  term  unemployment; 
vocational  training; 
technical  advice  concerned  with  job  creation; 
facilitate  the  adaptation  of  workers  to  industrial  changes  and  changes 
in  production  system. 

All  applications  for  assistance  are  submitted  through  the  Member  States. 
Money 
from  the  Social  Fund  is  paid  out  on  a  horizontal  and  not  on  a 
sectorial  basis,  so  an  extrapolation  corresponding  to  the  concept  of  aid 
within  the  meaning  of  Article  92  of  the  Treaty  is  not  possible. 

Regional  Fund 
The  European  Regional  Development  Fund  (ERDF)  aims  to  reduce  disparities 
within  the  Community  by  providing  financial  support  t o: 

regions  whose  development  is  lagging  behind  (Objective  1); 
regions  in  industrial  decline  (Objective  2); 
rural  problem  areas  (Objective  5b). 

This  support 
productive  investment. 

is  focused  mainly  on  infrastructure,  human  resources  and 

As  ERDF  aid  is  generally  paid  out  on  a  horizontal  and  not  on  a  sectorial 
basis,  identification  of  expenditure  which  corresponds  to  the  concept  of 
State  aid  within  the  meaning  of  Article  92  of  the  Treaty  is  not  always 
possible.  As  an  alternative,  figures  relating  to  industry  and  services  and, 
economic  development  have  been  retained;  the  data  obtained  by  using  this 
approach  therefore  only  provide  an  idea  of  the  scale  of  ERDF  aid  involved. 

Cohesion  Financial  Instrument  -  Cohesion  Fund 
After  the  principle  of  the  Cohesion  Fund  had  been  incorporated  into  the 
Maastricht  Treaty, 
to 
the  Edinburgh  European  Council 
establish  a  provisional  instrument  to  provide  Community  financial  support  to 
into 
the  beneficiary  Member  States  from  1993  while  awaiting  the  entry 
force  of  the  Treaty  which  in  turn  permitted  establishment  of  the  Cohesion 
Fund. 

further  decided 

The  Commission  adopted  the  proposal  for  a  Regulation  establishing 
the 
cohesion  financial  instrument  based  on  Article  235  of  the  Treaty  which  was 
subsequently  adopted  by  Council  on  30/IV/93  and  extended  until  the  end  of 
1994. 

The  Cohesion  Fund  was  established  by  Article  130d  of  the  EC  Treaty,  as 
amended  by  the  Treaty  of  Maastricht  and  represented  a  further  stage  in  the 
policy  of  solidarity  initiated  mainly  through  the  Structural  Funds.  This  Fund 
makes  its  o wn  specific  and  complementary  contribution  since  it  is  grounded 
principally  in  the  requirements  stemming  from  the  prospect  of  economic  and 

78 

monetary  union  (which  is  already  starting  to  become  a  reality).  From  the 
outset  the  Fund  has  created  its  own  identity  on  the  basis  of  three  major 
principles. 

The  first  is  its  limited  field  of  implementation:  the  protocol  on  economic  and 
social  cohesion  states  that  the  Cohesion  Fund  "will  provide  Community 
financial  contributions  to  ....  Member  States  with  a  per  capita  GNP  of  less 
than  9 0%  of  the  Community  average." 

Secondly,  assistance  is  restricted  to  the  part-financing  of  projects  in  the 
fields  of  the  environment  and  trans-European  transport  networks. 

Thirdly,  as  a  result  of  its  links  with  the  implementation  of  economic  and 
monetary  union,  the  Fund  assists  Member  States  which  have  drawn  up  a 
programme  complying  w i th  the  conditions  on  excessive  public  deficits  as 
laid  d o wn  in  Article  104c. 

In  addition  the  Cohesion  financial  instrument  and  later  (from  May  1994) 
Cohesion  Fund,  contributed  towards  the  objective  of  cohesion.  However 
infrastructure 
given  that  most  of 
projects  and  not  productive  investment,  the  figures  are  only  presented  for 
information  below  in  Table  B. 

the  credits  available  were  devoted  to 

Community  Research  and  Technological  Development  (RTD) 
Community  research  activities  are  conducted  essentially  at  t wo  levels: 

(I) 

(II) 

by  shared  cost  actions  with  third  parties  for  RTD  projects  and  by 
coordination  of  research  activities 
(Indirect 
actions). 
At  the  Joint  Research  Centre  (Direct  actions). 

in  the  Member  States 

(Science,  Research  and  Development)  administers 

DG  XII 
indirect 
actions  of  the  Framework  Programme  together  with  DG  III  (Industry),  DG  VI 
(Agriculture),  DG  VII  (Transport),  DG  XIII  (Telecommunications,  Information 
Market  and  Exploitation  of 
(Fishery)  and  DG  XVII 
(Energy).  According  to  the  4th  Community  Framework  on  RT&D  an  amount 
of  about  ECU  13,1  billion  from  the  EU  budget  will  be  spent  on  support  for 
research  during  the  period  1994-1998.  Most  of  the  budget 
to 
universities,  research  centres  and  industry.  A  little  bit  more  than  ECU  9 50 
million  is  allocated  to  support  the  European  Joint  Research  Centre. 

research),  DG  XIV 

is  going 

the 

ECSC  financial  operations 
Financial  assistance 
grants.  The  loans  fall  into  three  main  categories: 

is  provided  by  the  ECSC  in  the  form  of 

loans  and 

industrial  loans; 
conversion  loans; 
loans  for  workers'  housing 

79 

and  are  granted  at  market  rates.  The  fact  that  the  financial 
institutions 
which  distribute  the  loans  are  non  profit-making  could  be  advantageous  to 
the  recipient  of  the  loan  but  this  advantage  is  not  considered  as  aid  for  the 
purposes  of  the  Treaties.  The  situation  with  regard  to  grants  is  different. 
loans)  would  normally  be  considered  as 
Whilst 
constituting  aid,  other  measures,  notably  payments  of  a  social  nature  to 
former  steel  and  coal  sector  workers,  are  less  likely  to  be  considered  as 
such. 

interest  subsidies 

(on 

European  Investment  Bank 
The  mission  of  the  Bank  is  to  further  the  objectives  of  the  European  Union 
by  making  long-term  finance  available  for  sound  investment.  Created  by  the 
Treaty  of  Rome,  shareholders  are  the  Member  States  and  the  Board  of 
Governors  is  composed  of  the  Finance  Ministers  of  these  States.  To  receive 
fundamental 
support,  projects  and  programmes  must  be  viable 
areas:  economic,  technical,  environmental  and  financial.  Through  the  Bank's 
o wn  lending  operations  and  ability  to  attract  other  financing,  the  range  of 
funding  possibilities  is  widened.  Through  the  borrowing  activities,  the  Bank 
contributes  to  the  development  of  capital  markets  throughout  the  Union. 
The  Bank's  policies  are  established  in  close  cooperation  w i th  the  Member 
States  and  the  other  Institutions  of  the  European  Union.  There  is  also  close 
the  main 
cooperation  w i th 
international  organizations  in  the  field. 

the  business  and  banking  sectors  and 

in  four 

for 

the  development  of 

European  Investment  Fund 
The  European  Investment  Fund  is  a  new  financial  agency  set  up  to  provide 
guarantees  to  support  medium  and  long-term  investment 
in  t wo  crucial 
the  European  economy;  Trans-European 
areas 
in 
Networks  (TEN)  and  Small  and  Medium-Sized  Enterprises.  Established 
the 
June  1 9 9 4, 
the 
European 
the 
Commission,  cooperate  with  the  banks  and  financial 
Member  States.  By  Commission  Directive  dated  15  March  1 9 9 4,  it  was 
granted  Multilateral  Development  Bank  status. 

is  a  new  and  unique  partnership 
the  European  Union, 

in  which 
through 
institutions  of 

Investment  Bank  and 

the  Fund 

The  fundamental  objective  of  the  Fund  is  to  draw  more  private  capital  into 
infrastructure  finance  and  to  improve  the  flow  of  financial  resources  to  the 
small  and  medium  business  sector.  It  will  do  this  by  developing  mechanisms 
to  transfer  and  share  financial  risk  and  will  concentrate  on  the  provision  of 
financial  guarantees  on  medium  and  long-term  lending  by  banks  and  other 
financial  institutions. 

In  addition  to  senior  long-term  debt  for  TEN  projects  it  will  be  able  to  cover 
private  placements,  bond  issues,  revenue  or  asset  backed  securities  and 
subordinated  debt.  For  SME  finance  it  can  cover  portfolios  of  loans,  credit 
lines  and  securitized  assets. 

NCI  loans  (New  Community  Instrument) 
The  aim  of  NCI  loans  was  to  finance  investment  projects  which  contributed 
integration  of  Member  States'  economic 
to  greater  convergence  and 

80 

policies.  A  large  part  of  the  finance  (approx.  60%)  was  used  to 
finance 
projects  in  the  field  of  energy,  infrastructure,  and  development  of  small  and 
medium-sized  enterprises.  Loans  were  also  granted  to  restore  infrastructure 
in  Community  areas  affected  by  earthquakes.  The  loans  were  administered 
by  the  European  Investment  Bank  on  behalf  of  the  Union.  Interest  rates 
for  each 
were  set  at  market  rates,  plus  a  margin  to  cover  overheads 
currency.  The  only  assessable  economic  benefit 
the  recipient  could 
originate  from  the  non-profit-making  nature  of  the  Bank.  Such  an  advantage 
would  be  insignificant  in  the  present  context. 

to 

II.  Statistical  Data 

1. 

Table  A  sets  out  in  global  terms  the  financial  intervention  of  the  Community 
for  the  years  1 9 90  to  1 9 9 4. 

2.  y  Table  B  shows  other  Community  instruments  granted  for  the  years  1 9 90  to 

1 9 9 4. 

3. 

4. 

5. 

6. 

Tables  C1  and  C2  indicate,  for  the  periods  1 9 9 0 - 1 9 92  and  1 9 9 2 - 1 9 94 
respectively,  the  average  annual  volume  of  Community  intervention  broken 
d o wn  by  Member  State  where  ever  possible. 

that  a  direct  comparison  between 

It  should  be  noted 
the  volume  of 
Community  intervention  shown  here  and  the  national  State  aid  described 
earlier  in  this  Survey  (i.e.  aid  financed  by  national  budgets  and  tax  systems) 
is  misleading,  since 
to 
determine  the  aid  element  contained  in  the  Community  interventions,  which 
is  not  paid  directly  to  firms  like  State  aid. 

in  many  cases 

impossible, 

is  difficult, 

if  not 

it 

for 

intervention  are 

the  most  part  not 

In  the  agricultural  sector,  making  comparisons  could  result  in  erroneous 
conclusions  being  drawn  owing  to  the  fact  that  those  w ho  benefit 
from 
Community 
regards 
comparison  between 
the  benefits  of 
Community  intervention  are  felt  by  all  operators  in  the  Union  irrespective  of 
where 
took 
the  expenditure  (i.e.  export  refunds  or  intervention  buying) 
place.  As  to  comparison  between  Community  and  national  expenditure, 
expenditure  by  the  Union  is  strongly  influenced  by  the  differences  between 
fluctuating  world  prices  and  Community  prices  for  agricultural  products, 
which  is  not  the  case  w i th  most  national  expenditure. 

the  different  Member  States, 

firms.  As 

Further  details  of  Community  Funds  are  given  in  the  Technical  Annex. 

Further  detailed  information  on  Community  funds  and  instruments  can  be 
found  in  the  following  documents 

-Research  and  Technological  Development  Activities  of  the  EU,  annual  report 
1 9 9 5.  ISBN  9 2 - 7 7 - 9 3 7 6 1 -0 
-The  Structural  Funds  in  1 9 9 4,  6th  annual  report.  ISBN  9 2 - 8 2 7 - 5 7 2 7 -7 
-The  First  report  on  Economic  and  Social  Cohesion  1996.  ISBN  9 2 - 8 2 7 - 8 8 7 7-
6 

81 

-Cohesion  financial  instrument  Cohesion  Fund.  Combined  Report.  ISBN  92-
827-5739-0 
-Annual  Report  Cohesion  Financial 
84777-8 
-ECSC  Financial  report  1994.  ISBN  92-827-4625-9 
-Trans-European  Networks  Report.  ISBN  92-826-8995-6 
-The  Twenty  fourth  Financial  Report  concerning  the  European  Agricultural 
ISBN  92-77-

Guidance  and  Guarantee  Funds-Guarantee  Section.  1994. 
94440-4 

Instrument  1993/1994. 

ISBN  92-77-

-European  Investment  Bank  1995  Annual  Report  ISBN  92-827-6303-X 

82 

Table  A 

Annual  Community  Expenditure 

1990 

1991 

1992 

1993 

1994 

Million  ECU 

EAGGF  Guarantee-Agriculture 

26503,3 

31824,8 

32005,4 

34496,3 

32831,4 

EAGGF  Guidance-Agriculture 

1973,9 

2408,1 

2874,4 

3092,4 

3335,4 

EAGGF  Guarantee-Fisheries 

EAGGF  Guidance-Fisheries/EFFG-  FIFG(from  1994) 

23,6 

226,6 

26,2 

32,1 

32,4 

35,5 

294,0 

358,4 

401,8 

391,0 

SOCIAL  FUND 

REGIONAL  FUND  (1) 

COHESION  FUND 

3504,2 

4785,8 

5894,2 

6306,8 

5826,8 

776,0 

1152,0 

1374,0 

1635,0 

1803,0 

-

-

-

1565,0 

1853,0 

EC R&TD  FRAMEWORK  PROGRAMME 

1602,0 

1567,0 

2391,0 

2094,0 

2019,0 

ECSC  Grants 

Resettlement  Art.  56.2(b) 
Steel  social  Art.  56.2(b) 
Coal  social  Art.  56.2(b) 
Research Art.  55 
Interest  relief  Art.  54/56 

TOTAL 

184,0 
45,2 
40,0 
93,9 
82,2 

166,1 
20,0 
35,7 
128,1 
104,5 

154,8 
46,2 
50,0 
120,2 
106,0 

182,4 
60,0 
50,0 
124,6 
114,3 

157,0 
86,0 
40,0 
52,0 
51,5 

35054,9 

42512,3 

45406,7 

50155,0 

48481,6 

(1)  part  corresponding  approximately  to  the  concept  of  aid  within  the  meaning  of  Article  92  of  the  Treaty 

83 

Table  B 

Other  Community  Instruments 

ECSC  (new  loans  issued) 

European  Investment  Bank* 

European  Investment  Fund** 

NCI  (new  loans  issued) 

Financing  provided  within  the  EU 

* 
**  Guarantees  approved 
SOURCES:  Annual  reports 

1990 

1991 

1992 

1993 

993,8 

12526,3 

-

23,6 

1382,2 

14398,8 

-

39,2 

1486,2 

16066,0 

918,3 

17672,6 

-

-

-

-

Million  ECU 

1994 

673,4 

17656,0 

643,0 

-

84 

Table  C1 

Community  Average  Annual  Expenditure  by  Member  State  ( 1 9 9 0 - 1 9 9 2) 

EAGGF 
Guarantee 

EAGGF 
Guidance 

EAGGF 
Guarantee 
Fisheries 

1227,1 

1161,2 

4811,4 

2119,8 

2990,4 

6130,1 

1604,5 

4839,2 

3,1 

2628,9 

317,5 

2278,0 

22,6 

18,6 

206,5 

285,9 

458,6 

435,2 

161,6 

294,4 

5,7 

16,1 

244,6 

100,6 

0,2 

1,4 

0,8 

0,7 

10,5 

8,0 

1,4 

1,6 

-

0,1 

1,0 

1,6 

BELGIUM 

DENMARK 

GERMANY 

GREECE 

SPAIN 

FRANCE 

IRELAND 

ITALY 

LUXEMBOURG 

NETHERLANDS 

PORTUGAL 

UNITED  KINGDOM 

EAGGF Guid 
Fisheries/& 
EFFG-FIFG 
2,5 

16,3 

18,7 

21,2 

86,1 

27,5 

129,8 

42,9 

537,2 

395,7 

867,8 

590,4 

9,2 

347,7 

47,7 

522,4 

-

2,9 

9,2 

109,7 

44,4 

10,3 

448,2 

733,4 

SOCIAL 
FUND 

REGIONAL 
FUND 

COHESION 
FUND 
(from  1993) 

EC R&TD 
Framework 
Programme* 

ECSC 
GRANTS* 

Million  ECU 
TOTAL 

33,7 

9,0 

219,0 

67,7 

197,7 

90,3 

109,0 

129,0 

4,3 

5,7 

171,7 

63,7 

1415,9 

1249,4 

5793,6 

2891,0 

4611,1 

7281,5 

2233,4 

5834,3 

16 

2769,7 

1227,4 

3187,6 

TOTAL 

30111,2 

2250,4 

27,3 

293,1 

4728,1 

1100,8 

1853,0 

459,0 

40822,9 

1853,0 

459,0 

2312,0 

It  is  not  possible  to  effect  a  breakdown  by  Member  State. 

85 

Table  C2 

Community  Average Annual Expenditure  by  Member  State  (1992-1994) 

EAGGF 
Guarantee 

EAGGF 
Guidance 

EAGGF, 
Guarantee 
Fisheries 

EAGGF Guid 
Fisheries/& 
EFFG-FIFG 

SOCIAL 
FUND 

REGIONAL 
FUND 

COHESION 
FUND** 
(&  instrument) 

EC R&TD 
Framework 
Programme 
* 

Million ECU 

ECSC 

TOTAL 

GRANTS* 

BELGIUM 

DENMARK 

GERMANY 

GREECE 

SPAIN 

FRANCE 

IRELAND 

ITALY 

LUXEMBOURG 

NETHERLANDS 

PORTUGAL 

1278,7 

1257,1 

35,8 

28,7 

4979,7 

434,2 

2522,5 

4011,5 

7680,5 

1513,9 

4469,0 

6,9 

2207,5 

519,2 

353,8 

530,4 

602,5 

179,5 

421,3 

8,4 

24,5 

371,4 

110,2 

0,2 

3,4 

0,9 

0,9 

10,7 

10,1 

2,2 

1,1 

-

0,1 

1,8 

1,8 

4,6 

154,7 

29,6 

16,3 

36,1 

54,3 

798,5 

461,2 

127,1 

1146,7 

31,9 

665,6 

7,8 

307,0 

52,1 

886,6 

-

5,0 

7,9 

163,5 

50,3 

20,0 

597,9 

768,3 

30,0 

6,5 

304,4 

131,9 

273,7 

145,6 

120,6 

181,1 

3,9 

12,9 

279,3 

113,9 

306,3 

936,4 

154,8 

309,0 

0,8 

1504,0 

1379,6 

6534,0 

3812,7 

7036,5 

9136,2 

2285,8 

6011,2 

24,2 

2416,4 

2128,9 

3678,9 

0,8 

UNITED KINGDOM 

2664,7 

Technical 
Assistance 

TOTAL 

33111,2 

3100,7 

33,2 

383,7 

6009,3 

1603,8 

1707,3 

2168,0 

465,0 

48582,2 

2168,0 

465,0 

2633,0 

It  is  not  possible  to  effect  a breakdown  by  Member  State 

(*) 
(**)  1993-1994  only. 

86 

ISSN 0254-1475 

COM(97) 170 final 

DOCUMENTS 

EN 

01  08  10  09 

Catalogue  number  :  CB-CO-97-162-EN-C 

ISBN  92-78-18759-3 

Office  for  Official  Publications of the European  Communities 

L-2985  Luxembourg